US Partner NCRC shares details of recent dialogue with the Obama Administration and a forthcoming paper explaining what happened and the response the US is taking. NEWS FROM THE STATES: The current global financial meltdown began with the collapse of the U.S. Subprime Mortgage Market, which continues to wreak havoc throughout that nation and the world. What really happened, and what is being done in response – by lawmakers and the Obama Administration, by bank regulators, and by civic leaders and hard-hit communities? More importantly, is anything making a difference, and what lies ahead? And what are implications for the non-U.S. economies around the world that still reel with the continuing shock-waves? POSTED THIS WEEK ON THE ECRC WEBSITE: A new essay by Maryellen Lewis (NCRC board member who chairs the Global Fair Banking Initiative) – including contributions from new research and from actions being taken across the U.S. – lays out the U.S. challenge and what is being done, along with emerging evidence that must be taken into account for any future success. The National Community Reinvestment Coalition is working closely with the Obama Administration and Congress to craft a new approach to financial sector oversight, which will be based on the core learnings from the financial crisis: THE COMMUNITY REINVESTMENT ACT/CRA – Contrary to false early reports, the CRA was a bright spot throughout the crisis, protecting depository institutions from the worst practices that led other financial institutions to disaster. But the CRA only covered a small percentage of financial institutions, and it the high-risk behaviors and malfeasance by CRA-exempt companies that created the meltdown. Ms. Lewis’s paper summarizes the evidence with links to key research from, for example, the Federal Reserve Board (the U.S. central banking authority). She also details current efforts by NCRC, the Obama Administration, the U.S. Congress and others across the county, to expand CRA so that it covers more of the financial sector in future. LACK OF OVERSIGHT BY THE FEDERAL REGULATORY AGENCIES allowed financial firms to flood the market with toxic financial products that included predatory terms and conditions. Those same federal agencies turned a deaf ear to consumer advisory groups, legal aid attorneys and even national research by NCRC and others that demonstrated the tragic consequences, especially for vulnerable populations such as the elderly, the less-educated and the poor. Racial and ethnic minorities, among others, were demonstrably targeted for predatory lending practices. Ms Lewis’s paper summarizes the regulatory agencies’ role in the crisis and how that has shaped the response – including a new, independent regulatory agency focused on consumer protection now proposed by the Obama Administration GRASSROOTS DEMOCRACY IN ACTION – The Obama Administration brings fresh air and sunlight to the nation’s sometimes jaded sense of democracy, and the change is visible everywhere. For the Fair Banking and Economic Justice movement, though, this is the mother’s milk that raised it, back in the 1960s and 1970s. Now, citizen actions against predatory lending and for better consumer protections – as well as for clampdowns on illegal practices that target minorities and low- to moderate-income populations – have exploded across the nation. Ms Lewis gives an overview of the goals, strategies and early outcomes of these citizen actions, as well as the growing international conversations that promise greater collaboration across borders. Clearly, financial markets are linked around the globe and impact everyone – so the time is ripe for interconnected citizen action calling for fairness and consumer protections regardless of geography, race, ethnicity, gender, or any other characteristic that is so wholly unconnected with bankability or creditworthiness. ID: 43777 Author(s): iff Publication date: 20/07/09     URL(s): http://www.ncrc.org/

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Created: 22/07/09. Last changed: 28/07/09.
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