file_Defend_Family_Savings_End_Abusive_Lending

Defend Family Savings: End Abusive Lending Background The historic downturn in the housing market, along with significant challenges to the U.S. banking system, has eroded the wealth of Latino families. Experts predict that more than 1.3 million Latino families may lose their homes to foreclosure between 2009 and 2012. Moreover, defaults on credit cards and auto loans continue to rise. Unfortunately, many Latinos have been targeted and sold predatory loans and credit cards, even when they had good credit.

Like all Americans, Latino borrowers rely on financial tools home loans, credit cards, and car loans to make ends meet and, ultimately, build financial security through savings and assets. These tools can help families provide for retirement, their children s education, and small business opportunities, or serve as a safety net in times of emergency.` NCLR s Position NCLR supports strong federal laws that will promote fair and affordable credit and protect borrowers from predatory lenders. This includes the creation of the Consumer Financial Protection Agency, stronger protections against predatory lending and scams, and tougher standards on loan servicers to provide sustainable loan modifications. NCLR also supports increased funding for nonprofit housing and financial counseling.

Main Considerations Provide assistance to homeowners facing foreclosure. Homeownership represents approximately two-thirds of Hispanic families net worth. Therefore, the loss of a home means the erosion of a family s financial security. Congress should support measures that assist families, including tougher standards for loan servicers to help struggling homeowners, stronger protections against foreclosure rescue scams, and funding for housing counseling agencies.

Protect consumers from abusive lending practices. The absence of effective regulatory policy and oversight has allowed unscrupulous lenders to lure borrowers into unfair and abusive financial products.

As a result, Latino and other communities of color bear a disproportionate share of the consequences of the economic downturn. Congress should create a consumer-focused agency dedicated to protecting Americans from unfair and abusive financial products and services.

Provide access to financial counseling. Low- and moderate-income families have the same need for personalized financial advice as affluent families. However, there is a severe shortage of affordable financial planning services. Financial counseling will help families who lack effective relationships with banks, as well as victims of foreclosure who need one-on-one advice to help them restore their financial security. Congress should support legislation that provides funding for nonprofit organizations to offer free financial counseling for low- and moderate-income families.

For more information, contact Graciela Aponte, Wealth-Building Legislative Analyst, at (202) 776-1578 or gaponte@nclr.org.