Today, 7 out of 9 members of the Indiana House delegation voted to undo consumer protections put in place after the financial crisis to guard against future economic crashes and bailouts. The legislation in question, the so-called Financial CHOICE Act, passed the U.S. House of Representatives by a vote of 233-186.
“We just don’t understand it,” said Kelsey Clayton of Indiana Assets & Opportunity Network. “Elected representatives are supposed to stand up for Indiana communities but instead they decided to support legislation that explicitly protects payday lenders, cripples the government watchdog, and allows banks to go back to doing the same kinds of deals that forced us to bail them out. It’s hard to believe a lesson was learned.”
The Financial CHOICE Act destroys the Consumer Financial Protection Bureau’s ability to create or effectively enforce laws that stop mortgage companies, debt collectors, student loan servicers, and other financial services companies from harming consumers. In addition, the CFPB’s Consumer Complaint Database would hide the names of companies – removing an incentive for treating customers fairly and a valuable tool for tracking companies with systemic abuses. Since the agency’s inception, its consumer complaint system has helped over 8,000 Hoosiers with such concerns.
Additionally, the bill would:
- Take away the CFPB’s core authority to stop companies from pushing unfair, deceptive, or abusive products and practices. This is the authority that has allowed the CFPB to stop, for example, debt collectors from illegally threatening consumers or credit card companies from ripping off customers with hidden fees.
- Create massive loopholes in the rules put in place to discourage the kind of unaffordable mortgages that were at the heart of the foreclosure crisis.
- Exacerbate “Too Big To Fail” by stripping agencies of the power to wind down megabanks without bailouts or inflicting widespread harm on the economy.
- Barred from regulating payday lenders, who drain over $70 million in fees from Indiana residents with a typical loan charging 391% APR and designed to trap borrowers in a cycle of debt.
The members who voted in favor of H.R. 10 legislation included Rep. Walorski, Rep. Brooks, Rep. Rokita, Rep. Messer, Rep. Banks, Rep. Hollingsworth, and Rep. Bucshon.