Women, Financial Reform and Consumer Protection
April 28, 2010
Guest post by Margot Dorfman, CEO of the U.S. Women's Chamber of Commerce and Progressive Women's Voices alumna
Women and women-owned businesses are major stakeholders in our nation’s bid to reform the ruthless and deceptive practices of Wall Street that have devastated our small businesses, our families and our communities.
Women, who have lost their businesses and jobs, and have been prime targets of predatory lending practices, payday loans, and subprime loans – have seen their retirement funds decimated and their businesses and families crippled by an unbridled financial system led by Wall Street gamblers who don’t care who they hurt or how they contort our economy just as long as their bonuses and bailouts keep their own pockets fat with cash.
Wall Street has become totally disconnected from families, our Main Street communities and from the good old-fashioned American values and work ethic that made America the greatest economic force in the world. Big financial firms are so disconnected that – all in the name of greed – they targeted women and their families for expensive and risky subprime loans and horribly expensive payday loans. Day after day Wall Street bets against women, small businesses, families and communities.
- Women were 41% more likely to have received high-cost subprime loans, regardless of income.
(Consumer Federation of America, “Women are Prime Targets for Subprime Lending” (December 2006) (“CFA”)
- Women were 32% more likely to have received subprime mortgages of all types than men, regardless of income.
The U.S. Women’s Chamber of Commerce calls upon Congress to enact comprehensive financial reform that will stop shadow banking, stop unscrupulous betting against American women, families and businesses, stop institutions from becoming so intertwined and large that they are privileged as “too big to fail,” stop CEO bonus-ridden bailouts, and stop undue influence within our governmental oversight by the very firms we seek to oversee.
Included in financial reform must be the establishment of a strong, fully independent Consumer Financial Protection Agency – not just an internal bureau of the heavily Wall Street influenced Federal Reserve. This independent agency must serve with authority over all financial products, whether bought at a bank or a non-bank. It must not be hamstrung by influence exerted by Wall Street insiders whose feckless gambling turned our homes, businesses and retirements into gambling chips.
According to a new Washington Post-ABC News poll, about two-thirds of Americans support stricter regulations on the way banks and other institutions conduct their business. The area with the highest levels of cross-party support is on more robust federal oversight of the way banks and other financial companies make consumer loans, such as auto loans, credit cards and mortgages.
The creation of a strong, independent Consumer Financial Protection Agency will benefit women-owned businesses, especially small businesses, which create most of the nation's new jobs. It's too often forgotten that women-owned small-business owners frequently rely on personal credit – such as personal credit cards and home equity loans – to start, run and expand their businesses.
Women business owners have been hurt especially hard by predatory lending targeted at women. Millions of women business owners, who used their home equity to secure small-business loans, are at risk of losing both their homes and businesses. Many women, who were already at a higher risk for retirement insecurity, are now terrified about what the future will hold.
It is vitally important to the financial well-being of America’s Main Street small businesses that the Senate strengthens the S. 3217: Restoring American Financial Stability Act of 2010 by establishing the independence of the agency established to protect consumers and preventing any lenders to be exempt from full oversight by the agency. The Senate should resist the efforts of Wall Street to water down the Consumer Financial Protection Agency through further amendments to remove power from states and attorneys general to enforce or enact consumer protection laws and oppose amendments to carve out special exemptions for certain types of businesses. All lending – bank or non-bank should be monitored for unscrupulous and deceptive activities.
Women need the security of knowing that the costs and risks of financial products, services and lending are fully and fairly disclosed. We need a strong Consumer Financial Protection Agency with independent rule-making authority and enforcement powers -- not subject to veto by the very bank regulators who failed to protect consumers and small business owners from the predatory lending at the heart of the economic meltdown.
The stakes are high for women and women-owned small businesses. We cannot let Wall Street executives – whose risky, deceptive practices destroyed so many jobs and small businesses – kill the reforms that are needed to prevent the next calamity.
It is time for our Congressional leaders to act. Members of Congress -- America’s Main Street needs you to act on our behalf today. Pass strong, comprehensive financial reform, and create a truly independent Consumer Financial Protection Agency.
- Payday loans are disproportionately taken out by families headed by single women.
(Center for American Progress, “Who Borrows from Payday Lenders” (March 2009))
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