Conference Report on H.R. 4173, Dodd-Frank Wall Street Reform and Consumer Protection Act

* Ms. JACKSON LEE of Texas. Mr. Speaker, I rise in strong support of H.R. 4173, ``the Restoring American Financial Stability Act of 2010'', also known as ``the Dodd-Frank Act.'' This historic bill will go a long way to address a variety of defects and shortcomings currently seen in our financial services system. It is a major step towards meaningful ``measured'' government regulation to protect the interests of consumers, investors and everyday working Americans. After years of consumer mistreatment, fraud, and abuse, this bill represents the first principled effort to bring financial fairness to all Americans and to ensure that financial transactions be both honest and transparent.

* One of the strongest provisions designed to protect the consumer in this legislation is the formation of an independent Consumer Financial Protection Bureau, CFPB, empowered to write rules for most consumer financial transactions. Existing consumer-protection authority is currently scattered and largely ignored by existing financial regulators. This Act will consolidate these authorities in the CFPB, and give the bureau teeth in exerting its power to enforce these protections. With this newly defined power, the creation of the CFPB will usher in a new era of oversight. I urge Congress to stand tall and create a society where unfair practices are stopped before they become pervasive, where the average consumer is protected from fraud and abuse, and where big bank bailouts are prevented before they come at the expense of taxpayers.

* Another major provision in this bill is the establishment of broad statutory protections against abusive mortgages. These provisions include; requiring lenders to evaluate borrowers' ability to repay loans before and after teaser rates have expired; banning prepayment penalties that lock borrowers into high-cost loans; prohibiting incentives to steer borrowers into higher-cost loans that they don't even qualify for; limiting total fees for most loans; and banning mandatory arbitration clauses for mortgages.

* In addition to these key provisions, this bill will also create a $1 billion emergency loan fund to help families at risk of losing their homes due to unemployment or illness. Because unemployment--9.7 percent is partly a direct result of the reckless lending and collapse of the housing and financial markets, this fund is especially important in reversing these negative economic effects and providing assistance to those who have been hurt by unfair practices. A recent Center for Responsible Lending, CRL, report found that, unfortunately, the foreclosure crisis is far from over. Foreclosures are likely to continue to climb and losses will continue to increase, further burdening our economy and financial services system, unless the government decides to intervene by passing this Act.

* The bill also addresses bank interchange fees, the fees charged on debit card transactions. Under the bill, such fees would be reduced. While the banks and credit unions opposed any reduction in fees as embraced by the Durbin amendment, the arguments advanced by the retailers won the day. While I support credit unions, which are the backbone of many communities and have traditionally served the special needs of teachers,public service employees and the average government worker, about the use of the fees to cover many bad transactions related to their debit card business, the fees generated by the debit card transactions represent a major profit making activity for the banking industry. These fees are generally passed onto the consumer in the form of higher retail prices. Interchange fees also tend to fall disproportionately on minority and low-income consumers by making them pay higher prices.

* Another issue the bill addresses is the underrepresentation of minorities and women in the financial services industry. The bill requires each of the federal financial services regulatory entities to establish Offices of Minority and Women Inclusion. These Offices will facilitate the participation of minority and women-owned business in nontraditional types of financial activities, something long overdue. In addition, the bill requires expanded efforts to recruit and to retain minority and women financial services professionals, traditionally excluded from the upper ranks of management in most of the federal financial services regulatory entities.

* The bill preserves the role of community banks, recognized for their positive lending habits to small business and other major community stakeholders. These banks can always be counted on to lend for nontraditional purposes, while maintaining flexible lending standards based on risk assessment as it relates to a person's background and ties to the community. Many of these banks continued to lend during the liquidity crises, making it possible for small businesses to make payroll and for people to continue to pay their mortgages. Community banks remain pillars of strong communities and neighborhoods throughout this Nation, and this bill acknowledges their important role in the economy.

* Further, the bill brings much needed sanity to the derivatives markets by requiring more rigorous standards related to over-the counter derivatives; provides new rules related to transparency and accountability and our nation's credit agencies; institutes new mechanisms to avoid bank bailouts of financial firms that threaten the economy; and reforms the Federal Reserve by requiring greater oversight and transparency in its transactions.

* Mr. Speaker, this Act is of extreme importance to the consumer, the investor, to the average American, and to the Nation's economy as a whole. It is time to end the Wall Street ``joy ride'' and give the American people the protections and information they need to be better informed consumers and investors in this highly technologically driven economy. The way the average consumer, borrower, and home-owner have been targeted by many of our Nation's financial institutions and lenders makes this legislation all the more important. These practices must end. H.R. 4172 will stop many of them. For these reasons, I urge my Colleagues to make the changes in our laws to protect the American people and to help strengthen the U.S. financial system.

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