As 2020 continues its barrage of what can be called “negativity,” the year has also brought many positive milestones. One such milestone is the 10th anniversary of the Dodd Frank Act.
Recognizing this milestone, the Center for Responsible Lending (CRL), a non-profit organization dedicated to ensuring a fair and inclusive financial marketplace for marginalized and/or underserved populations, held a webinar last week to mark the occasion.
The Facebook Live event included remarks from Wade Henderson, immediate past president of the Leadership Conference on Civil and Human Rights; the Honorable Maxine Waters (D-CA, 43rd District); and the Honorable Elizabeth Warren (D-Massachusetts).
The event was moderated by Nikitra Bailey, executive vice president of CRL.
According to History.com, “The Great Recession, a crisis that left millions of Americans unemployed and sparked worldwide economic decline, began in December 2007 and lasted well into 2009 … The Dodd-Frank Act, officially called the Dodd-Frank Wall Street Reform and Consumer Protection Act, is legislation signed into law by President Barack Obama in 2010 in response to the financial crisis that became known as the Great Recession.”
This financial crisis saw hundreds – if not thousands – of African Americans across the country lose their homes due to banks and mortgage lenders’ use of hidden fees and other unscrupulous methods in their attempt to sell their financial products.
Financial institutions unscrupulously sold these products – such as home loans – to individuals and families, critics say, who may not have been financially capable of meeting their obligations. Normally, this would have been something that should have been determined on the front end; overzealous institutions ignored these red flags, or charged higher interest and fees, which eventually caused turmoil in the financial services industry. That turmoil was what came to be known as cause for the recession.
Many activists charge that the turmoil’s cause was not haphazard, but that Black and Brown families were targeted and steered into costly sub-prime loans and other products by predatory lenders even though they qualified for prime loans.
Dodd-Frank came about as an effort to keep this phenomenon from ever happening again.
Amongst other measures, the Act established the following:
Banks must have a “contingency plan” to shut down in case they approach bankruptcy or run out of money;
Banks must increase the amount of money they keep in reserves for future slumps or other unforeseen phenomenon;
The Financial Stability Oversight Council (FSOC), which keeps watch on possible risks to the financial industry and serves as a check on large banks;
and the Consumer Financial Protection Bureau (CFPB). This bureau protects consumers from banks’ corrupt business practices and oversees credit and debit agencies, payday and consumer loans.
“As someone who has spent a lifetime fighting for civil and human rights, I recognize, all too well, this moment in time and the pain we’re all living through. People of color across the country and poor people, regardless of race, are suffering the worst impacts of an unprecedented economic crisis, and are in need of the protections and resources that will allow them to recover,” said Henderson.
“Once again, we find ourselves having to fight for these resources, to which we are entitled as citizens, with all of our strength and energy,” Henderson concluded.
Henderson then turned “the mic” over to Conf. Waters for her remarks on the occasion.
“After the public voted for a new House Democratic majority in 2018, I became the first woman and the first African-American to lead the financial services committee as chair,” said Waters.
“And so, as chairwoman, I have worked every single day to defend Dodd-Frank and the consumer bureau; to advance legislation to reverse the damage that the Trump administration has done to the consumer bureau, and to provide additional consumer protections,” she continued.
Waters stated that the Trump administration appointees to the Consumer Bureau have taken steps to destroy the agency from the inside, and in response, she had put forth HR 1500, known as the Consumers’ First Act, which passed in May of 2019. According to Waters, this was legislation specifically to block the Trump administration‘s anti-consumer agenda and reverse their efforts to undermine the mission of the Consumer Bureau.
Similar to Henderson’s remarks, Waters stated that we are now facing another crisis – the crisis of Covid-19 – and that she is working to ensure that Congress provides protections and relief to the many families that have been impacted by this pandemic across the U.S.
Sen. Elizabeth Warren also shared remarks on Dodd-Frank’s anniversary. Described by Cong. Waters as being the major force behind its creation, Warren stated, “It’s very important that we never forget what brought us into this fight. Like so many of our nation’s problems, The financial crisis was a toxic mix of racism, corruption and shameless greed.”
“Predatory mortgage lenders started by targeting Black and Brown communities where they began climbing away at the hard-earned wealth of Black and Brown families. And too few people in power could be relied on to care: not the investors making money hand over fist, not the regulators who were cozy with the banks; not the pundits who blamed the borrowers; not the lenders who were boosting their products,” she continued.
“They didn’t care because it was only happening in certain communities; communities of color. At its core, the financial crisis was a massive theft of power from millions of Americans. A massive theft of the American dream.”
Warren ended her comments with an exhortation to “fight” for America this November and beat Donald Trump and those aligned with him.
“If we stand together, if we fight together, if we persist together, we can build in America that works better for all of our families,” said Warren.