North Carolinians need to know that when protections for our citizens and military members from predatory lending was in jeopardy, Congressman Walter Jones was there.
Legislation recently passed in the U.S. House of Representatives would eliminate important consumer protections and prevent the Consumer Financial Protection Bureau from regulating payday lending. Congressman Jones, the Farmville Republican, stood with his constituents instead of payday lenders and Wall Street banks and voted against these bills.
First, Rep. Jones voted against the so-called CHOICE Act, a bill that would eliminate protections that prevent Wall Street from dragging us into another financial crisis. One provision would have eliminated the Consumer Bureau’s ability to regulate payday lending, a big concern for our military. As Congressman Jones said in a statement, “when service members are being taken advantage of, it’s wrong for Congress to take the cop off the beat.” We couldn’t agree more.
Then, Rep. Jones voted against a resolution that would strike down new rules that would restore our right to join in court and hold lenders accountable for misconduct and wrongdoing, instead of being forced to take the matter one by one to an arbitrator picked by the lenders themselves. While Jones stood on the side of consumers, many members of Congress, including several from North Carolina, continue to side with predatory lenders instead.
North Carolina is a leader in commonsense consumer financial protection. We passed the nation’s first anti-predatory mortgage lending laws in 1999. We are one of 15 states, plus the District of Columbia, to ban 300 percent APR payday and car title loans, saving our consumers $457 million every year. Numerous studies show that North Carolina fared better than other states in the financial crisis because of our common-sense laws.
After the financial crisis, Congress passed the Wall Street Reform and Consumer Protection Act. This law provided new protections, many modeled after laws here in North Carolina. The law also created the CFPB — the only federal agency that prioritizes consumer protection and holds the financial services industry accountable to working families.
The CFPB has recovered nearly $12 billion in relief to more than 29 million consumers harmed by illegal practices of credit card companies, banks, debt collectors, payday lenders, mortgage companies and others. Led by the Office of Servicemember Affairs, the CFPB has shut down several scams targeting the military.
The CFPB’s arbitration rule is the latest example of why we need a strong consumer agency that stops harmful financial practices. Financial companies bury clauses in the fine print of agreements that deny Americans the freedom to seek justice through our court system instead of a process rigged against them — secretive, without the right of appeal, and often with the arbitrator relying on the company for repeat business.
Protecting and building family wealth depends on our public leaders standing up for them. Congressman Jones deserves to be recognized for showing the courage of his convictions and voting against legislation that would weaken consumer protection.
We would call on Sens. Burr and Tillis to follow Rep. Jones’ example and vote against these bills in the Senate.
Christopher Kukla is an executive vice president of the Center for Responsible Lending, a Durham-based research and policy organization dedicated to eliminating abusive financial practices