Illinois Asset Building Group - Building Financially Strong Families and Communities

The current recession and financial crisis highlights the important role of asset ownership in creating financially stable communities.  As personal bankruptcies and mortgage foreclosures continue at record pace, the recently elected 111th U.S. Congress is considering several bills that would protect consumers and expand asset-building opportunities for all Americans:

Credit Cards/Overdraft

The Credit Cardholders’ Bill of Rights Act (HR 627, S 235) would prohibit abusive credit card practices such as double-cycling billing, universal default, and high-cost “fee harvester” cards.  The bill would accelerate the implementation of strong protections previously passed by Federal regulators.

The Consumer Overdraft Protection Fair Practices Act (HR 1456) would require consumer consent before banks can automatically enroll consumers in overdraft programs and defines overdraft fees as finance charges subject to the Truth in Lending Act.  It is designed to prevent high overdraft fees that plague consumers.

Predatory Lending

The Protecting Consumers from Unreasonable Credit Rates Act (HR 1608, S 500) would prohibit a wide range of lending abuses by capping interest rates for consumer credit at 36 % annually.

The Financial Product Safety Commission Act (HR 1705, S 566) would create a single Federal government agency that would prevent predatory or deceptive financial practices and educate consumers on the responsible use of financial products and services.

Mortgages & Community Reinvestment

The Helping Families Save their Homes Act (HR 1106), which passed the House in March, would allow for court-supervised mortgage modifications to help families stay in their homes.

The Community Reinvestment Modernization Act (HR 1479) would apply CRA to non-bank financial institutions, including mortgage companies and mortgage company affiliates of banks.

In 2009, IABG and our partners will continue to support proposals that protect consumers and support asset building at the national level.  We will also encourage our Congressional representatives to oppose legislation that weakens asset building opportunities and consumer protection.  Congressman Luis Gutierrez has proposed the Payday Loan Reform Act (HR 1214), which would permit single payment loans of 390 % APR for two weeks or 780 % APR for one week.  HR 1214 fails to address fundamental problems with the payday lending model and will not help consumers avoid these debt traps.  Visit the IABG Action Alert for a draft opposition letter that can be sent to your Congressperson.