Financial CHOICE Act: Lawmakers Quick to Forget the Lessons of the Great Recession
Earlier this month, Prosperity Indiana and the Indiana Institute for Working Families staff met outside the American History Museum on the National Mall in Washington, D.C. to prepare for a whirlwind round of visits to our lawmakers on Capitol Hill. On our agenda: ensure that lawmakers considered the perspectives of working Hoosiers and the agencies that stand alongside them each day, helping to make financial well-being a reality.
Our main policy target was the Financial CHOICE Act. This bill – which passed out of the House Financial Services Committee in early May – dismantles many of the financial reforms and consumer protections that were put in place following the Great Recession. This made our starting point at the American History Museum a bit ironic; how quickly many of our lawmakers seem to have forgotten the lessons of the past.
Of particular concern is the bill’s gutting of the Consumer Financial Protection Bureau (CFPB). It turns the agency – currently led by a single director – into a multi-person commission and makes its funding subject to the appropriations process. Then, it limits the agency’s rule-making authority, repeals its authority to address unfair, deceptive and abusive practices (UDAP), and outright blocks any regulation of the payday lending industry. Section 733 of the Financial CHOICE Act states, “NO AUTHORITY TO REGULATE SMALL-DOLLAR CREDIT – The Agency may not exercise any rulemaking, enforcement, or other authority with respect to payday loans, vehicle title loans, or other similar loans.” Beyond this, the Financial CHOICE Act nixes the fiduciary rule and raises the limits on interest and fees on manufactured home loans – an affordable entry point into home ownership for many families.
We sat across the table from legislative staff, asking them to stand beside the Hoosiers still reeling from a recession that cost many their jobs and their savings. We asked them to think about the cities and towns where high-cost loans or deceptive practices syphon hard-earned dollars out of the local community. We asked them for robust consumer protections and a strong watchdog. And now, we can only hope they will heed our call when the Financial CHOICE Act comes up for a vote in the House in early June.
It’s not too late to make your voice heard – and you don’t have to travel to D.C. to do it! Please consider signing our letter to show support for the CFPB and its efforts to reign in abuses that impact Indiana consumers. Members will also be home over Memorial Day recess. Contact Kelsey Clayton to learn how to make an appointment for an in-district meeting.