Janet MurguĂa, President and CEO NCLR (National Council of La Raza)
Latino Families' Fight for Banking Reform
Posted: November 4, 2009 12:25 PM
One of the most devastating consequences of today's economic turmoil is the large-scale loss of nearly a generation of wealth among Latino homeowners. With a new foreclosure occurring every 13 seconds, we face the turning point of a catastrophe that demands immediate action and long-term solutions. Many of these foreclosures are driven by a perfect storm of job loss and toxic mortgages sold to families despite the fact that they qualified for a standard prime loan. Stories about Wall Street bailouts, auto dealers shutting down, and other troubles of the Great Recession have saturated the news media. We are even already hearing about stories of recovery. These are premature. While the dust may be settling for big banks, Americans are stuck in cycles of debt, and foreclosure rates remain at record levels; 400,000 Latino families will lose their home to foreclosure this year alone. Maintaining the status quo is unacceptable. Weak oversight and limited accountability brought on this disaster. NCLR is keeping a sharp eye on banking reform, and we are committed to fixing this broken system for both the Latino community and all Americans. We can't rely on product vendors to police themselves. In the past decade, industry players steered families to unstable subprime loans, high-rate credit cards, and damaging payday loans that were the most profitable for the issuer but also did the most damage to household finances. What's more, we cannot rely on the current regulators to stand up for consumers. Their inaction, in spite of their authority to intervene, allowed millions of families to get stuck in a debt trap from which they will take years to emerge. Auto dealers, small-dollar lenders, and mortgage brokers provide critical services to Latino consumers--which is exactly why we need commonsense oversight of these industries. All too often we have seen bad practices driving out the good. Truly innovative financial products have been suffocated by deception and greed. Furthermore, while some housing counselors and families are doing what they can to keep their jobs and homes, industry lobbyists are pushing hard to declaw legislation moving through Congress. These are classic industry attempts to render bills useless before they even pass. Banking reform impacts all of us. As NCLR evaluates banking reform proposals, we will be asking four questions: 1. Does the proposal improve access to credit and make room for positive innovations? 2. Is there a mechanism to hold those in lending accountable for their financial products? 3. Does the proposal end deceptive lending practices? 4. Does the proposal make enforcement of the new laws and protections a priority? To learn more about Latino families' fight for banking reform, read this recent testimony before Congress, presented by Janis Bowdler, Deputy Director of NCLR's Wealth-Building Policy Project: http://www.nclr.org/content/publications/detail/59884/