Banking and Credit
Since the Great Depression, Congress has passed a series of laws to preserve stability in the banking and credit industries, protect consumers from unfair and deceptive practices and make affordable credit available to middle class and low-income families and small businesses. Beginning in the 1980s, the deregulation of financial institutions has fed speculative booms and devastating busts. Privatization of low-cost government credit for student loans and mortgages and weaker consumer protections has driven up the cost of credit and put consumers at risk.
Commentary
Information is power… and that’s the problem
Why #OccupyWallStreet?
Cry Wolf Quotes
CRA has enabled special interest groups to collect billions of dollars from banks under agreements that are kept secret. Even the citizens that these groups purport to represent have no way of knowing how the groups spend the money they get from banks. That s why I hope the Senate will approve a sunshine amendment that will add accountability to this process and bring these agreements into, the light of day.
It is simply wrong-headed policy…[Federal and state banking regulations] require or aggressively nudge banks into subsidizing parts of the community [The proposals] would only aggravate the problem.
If you compare what the card industry looked like 20 years ago to how it looks today, you’ll be astonished at how much better a deal consumers are lately getting. And government regulation isn’t what drove the improvement; free-market innovation and competition, did. Twenty years ago, all consumers paid the same interest rate—and it wasn’t low (19.8%).
There’s little doubt that the rating agencies helped inflate the housing bubble. But when we round up all the culprits, we shouldn’t ignore the regulators and affordable-housing advocates who pushed lenders to make loans in low-income neighborhoods for reasons other than the only one that makes sense: likely repayment… in 1995 the Clinton administration added tough new regulations. The federal government required banks that wanted 'outstanding' ratings under the act to demonstrate, numerically, that they were lending both in poor neighborhoods and to lower-income households. Banks were now being judged not on how their loans performed but on how many such loans they made. This undermined the regulatory emphasis on safety and soundness.
Related Laws and Rules
Evidence
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Banking Lobby's Warnings About CARD Act Disproven
What happened after credit card reform bill passed Congress in 2009 (it worked).
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The Successes of the CARD Act
The Consumer Financial Protection Bureau describes exactly what the act did and what the effects were one year later.
Backgrounders & Briefs
A Timeline of the CARD Act
An interactive timeline of credit card reform.
Resources
The National Community Reinvestment Coalition works against unfair lending and banking practices, particularly those targeted towards low and middle income families.
