Whether purchasing a home, buying a car, starting a business or investing for retirement, all Americans rely on a stable financial system to pursue their hopes and dreams. Unfortunately, the impact of the recent financial crisis and subsequent recession was widespread and severe—particularly for low-income families. During my previous service as member of the House Committee on Financial Services, I had the opportunity to delve into many of financial issues that have been on the forefront throughout our economic downturn. From helping homeowners avoid foreclosure to holding the financial industry accountable for irresponsible and predatory conduct, I continue to represent Hoosier interests as they relate to one of our nation’s most important sectors.
Reforming the Financial System – Wall Street Reform and Consumer Protection Act
In the fall of 2008, some of our nation’s largest financial institutions began to fail, and many others came dangerously close to collapse. Turmoil on Wall Street and elsewhere caused banks to stop lending, hurting businesses large and small on Main Street. Today, the American people are still dealing with the fallout from the financial crisis known as the Great Recession. In an effort to reduce catastrophic risk, protect depositors and taxpayers, and stabilize home prices, I proudly cosponsored the landmark Wall Street Reform and Consumer Protection Act, more commonly known as Dodd-Frank, which was signed into law by the President Obama. These reforms help to ensure that financial crises on the scale of the one we experienced recently will not happen again.
For more information on improvements made by Dodd-Frank to our financial system, click here.
Protecting Consumers Rights
The Great Recession demonstrated quite clearly the need to protect consumers from predatory lending, deceptive credit card terms and other abusive practices. I strongly supported the establishment of the Consumer Financial Protection Bureau (CFPB) to enhance fair market operations by increasing transparency, simplicity, fairness, accountability and access in the market for consumer financial products and services. Going forward, the American people will have greater confidence when taking out a loan to buy home or car or signing up for a credit card. I am confident that financial practices deemed to be “unfair, deceptive or abusive” will be sharply curtailed once the CFPB is fully funded and adequately staffed.
The CFPB is an independent agency with the authority to:
- Require credit-card issuers to reduce interest rates and fees
- Require mortgage lenders to give clear information to lenders
- Eliminate arbitration requirements often hidden in the fine print of consumer and investment contracts that create an unfair advantage for Wall Street firms and other lenders
To read more about my support of CFPB, click here.
Supporting Fair Credit Practices
CFPB is now responsible for administering the CARD Act, the Credit Card Accountability, Responsibility, and Disclosure Act, which I worked on in the Financial Services Committee and helped pass in the House.
Today, thanks to provisions of the CARD Act, industry practices have changed in four significant ways.
- The long-standing practice of hiking interest rates on existing cardholder accounts has been dramatically curtailed.
- The amount of late fees consumers are paying has been substantially reduced.
- Over-limit fees have virtually disappeared in the credit card industry.
- Consumers report that their credit card costs are clearer.
Improving Financial Literacy
The financial crisis that began in the fall of 2008 demonstrated quite clearly the need to improve consumers’ understanding the basic financial principals that affect their lives but all too often are not fully understood. Despite the dramatic impact of this most recent crisis on the pocketbooks of households across the country, financial literacy remains is all too often woefully deficient.
I introduced the Young Adults Financial Literacy Act to help young adults get off to the right start in managing their personal finances. Because early financial decisions can have such a huge impact on one’s financial future, my legislation will help young men and women to avoid the pitfalls that often lead to overwhelming debt, poor credit scores and overwhelming anxiety.
The Young Adults Financial Literacy Act calls upon the Departments of Treasury and Education to provide grants to community organizations, high schools and universities for purpose of improving financial literacy amongst young adults. By providing our young people with the knowledge and the tools they need to effectively manage their finances, they are far more likely to live comfortably, provide for their families, and feel secure in their retirement.
I encourage all my constituents to click here to test their financial literacy.