National CAPACD Calls on Congress to Oppose the “Wrong Choice Act”
Tomorrow, the House of Representatives is expected to vote to repeal most of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) through the Financial Choice Act of 2017 (H.R. 10), more accurately known as the “Wrong Choice Act.”
The National Coalition for Asian Pacific American Community Development (National CAPACD) believes that public policy must combat the structural barriers to economic mobility for our communities and we strongly oppose this bill because it sets us back years of progress. Dodd-Frank put in place consumer protections and financial safeguards in response to the 2008 financial crisis that cost our nation 8.7 million jobs, $19 trillion in wealth, and nearly 10 million homes.
If passed, the “Wrong Choice Act” opens the door to rampant consumer abuses and puts Americans’ rights at risk. The Consumer Financial Protection Bureau (CFPB) is instrumental in protecting communities of color against the unscrupulous practices of financial services providers. For example, communities of color, including AAPIs, are more likely to be targeted by subprime lenders (respectively, Asian, Black, and Hispanic families were 1.7, 3, and 2.2 times as likely as White borrowers to receive subprime loans even after accounting for similar credit profiles).1 While Native Hawaiian and Pacific Islander data on subprime lending is not available, we know that NHPIs were similarly disparately impacted by the foreclosure crisis. The average NHPI home value loss during the Great Recession was $47,000 compared with $9,100 for the total population.2 Due to these foreclosures, our families have battled substantial wealth loss, emotional stress, and a rocky financial future.
Most significantly, National CAPACD fears the consequences of the “Wrong Choice Act” as the bill would gut the CFPB, which has returned nearly $12 billion to 29 million Americans harmed by illegal financial practices.
Provisions in the “Wrong Choice Act” would:
- Revoke the CFPB’s authority to conduct education campaigns, which is an essential component of helping limited-English proficient communities understand the resources available to them.
- Eliminate the CFPB’s public consumer complaint database that forces wrongdoers to respond to consumer complaints. The complaint database is an important resource for Americans to understand and avoid consumer abuses.
- Subject the CFPB and the Federal Housing Finance Agency (FHFA) to partisan politics by making the director easily removable by the president, and puts the Consumer Bureau and other financial regulatory agencies’ funding at the mercy of congressional appropriators.
- Repeal the CFPB’s authority to stop unfair, deceptive, and abusive acts and practices (UDAAP) in consumer finance.
- Prohibit the CFPB from enforcing the law or issuing any regulation for payday, car title, or similar small-dollar loans. Payday and car title loans drain nearly $8 billion in fees each year from the most financially vulnerable Americans and often directly target communities of color, military service members, and seniors.
National CAPACD condemns any legislation that returns our communities of color to the periods of financial devastation we faced during the financial crisis. We urge members of Congress to vote against this bill. We also call upon our members to call their Congressmembers and ask them to vote against this bill when it comes to voting for final passage on the House floor. To find your member of Congress, click here. You may also call the Capitol switchboard at (202) 224-3121 and ask to be connected to your U.S. Representative.
2 U.S. Census Bureau, 2007-2009 American Community Survey, 3-Year Estimates.