WASHINGTON, D.C. – As soon as Friday, the Supreme Court could announce it will grant a writ of certiorari to review Community Financial Services Association of America, Limited v. Consumer Financial Protection Bureau, a lawsuit brought by the trade association for payday lenders that poses an existential threat to funding for the Consumer Financial Protection Bureau (CFPB) and, by extension, similarly funded agencies. The CFPB was established as a response to the 2008 Financial Crisis and the abuses it exposed.
“Prior to the creation of the Consumer Bureau, there were no meaningful checks on reckless and predatory financial practices. This led to a tsunami of foreclosures and job losses that were financially and emotionally scarring for American families,” said Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending (CRL). “The Consumer Bureau provides a needed check on predatory financial practices – both in punishing and in preventing misconduct.”
By the Numbers:
- 15 – Years between when Congress charged the Federal Reserve Board with prohibiting bad mortgage lending practices, through a 1994 law, and when rules from the Federal Reserve came into effect, in the fall of 2009 – too late to stop the epidemic of reckless lending. For more, see this 2009 CRL report on how "Regulatory Failures Show Clear Need for Agency."
- 2.2 million – Foreclosures that were predicted by a 2006 CRL report “Losing Ground.” At the time, this projection was derided by industry as “absurdly pessimistic,” but it ended up being too conservative. There were over 8 million foreclosures in the years surrounding the 2008 Financial Crisis.
- 95 million – Households estimated to have lost home equity because of neighbors’ foreclosures. On average, families affected by nearby foreclosures lost around $23,000, representing 8.8 percent of their home value. Families impacted in minority neighborhoods lost, on average, around $40,000, representing 16 percent of their home value. For more, see this 2013 CRL report on the spillover effects of foreclosures.
Just yesterday, CRL posted this LinkedIn article: “Ten Ways the Consumer Bureau Stops Predatory Lending.”
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