Growing and Protecting Neighborhood Wealth
Growing and protecting our wealth in low and moderate income families and neighborhoods is a key to our futures. But our communities have been the number one victims of predatory lending, payday loans, and other unfair financial schemes that drain our wealth and hold us down. That is why ACTION United members have been fighting for fairness for decades.
Our key areas of action have included:
- Homeownership and fair lending practices
- Foreclosure prevention
- Growing Wealth in our neighborhoods
These ACTION areas have been the back bone of our work and we will continue to fight for financial security for low and moderate income families and neighborhoods.
ACTION United v. Unfair Practices: A history of helping
Home ownership/Fair lending practices: for decades, Action United members have fought for fair lending practices. Starting in the 1970’s, members fought to get banks to lend into their communities, banks who “redlined” or wrote off whole neighborhoods because of race or income. Using data from Home Mortgage Disclosure Act (HMDA) reports, members first exposed this practice in the media, and then negotiated with banks to win lending programs tailored to those communities. By the mid 1990’s, the once lack of credit became a glut of credit, much of it bad credit with the growth of predatory lending products. Lenders were selling A loans in upper income communities, and b/c paper in lower income communities. Many times the b/c loans were predatory-with prepayment penalties, higher interest rates, yield spread premiums, etc. Philadelphia members passed the first municipal anti-predatory lending law in the country, only to see if wiped out by the state legislature. Members took on the largest of the predators, like Household Finance and won the largest AG settlement against them up until that time. Today, members are fighting for a strong financial reform bill, currently making its way through congress.
Foreclosure Prevention: the results of years or predatory lending in low and moderate income communities was a foreclosure crisis that was destroying huge amounts of wealth in our communities, lowering property values and leaving families without homes. Members at both sides of the state kicked off a campaign to fight foreclosures by targeting the sheriff for a foreclosure moratorium. Out of these efforts, the Philadelphia and Pittsburgh diversion programs were created: a program that requires lenders and borrowers to meet and attempt to work out a loan modification. In Philly, the program hires community organizations to do outreach. Both programs have resulted in thousands of families keeping their homes.
Growing wealth/Maximum Eligible Benefits campaign: in recent years, our members have fought to expand the Earned Income Tax Credit, have taken on the largest tax preparation companies for their selling of predatory lending products, like RAL’s in our communities, and have helped over 10,000 families get their taxes done for free while screening them to see if they qualify for EITC, or other benefit programs, like WIC or CHIP.
Key ingredients to real financial reform
(courtesy of Americans for Financial Reform)
A Strong Independent Consumer Financial Protection Agency (CFPA) that provides real, loophole-free protections for regular people against credit card fine print, incomprehensible trick mortgages, payday lending, and car dealers that get kickbacks.
- Auto dealers should be covered by the CFPA. Read why.
- State laws and Attorneys General should be allowed to add protections for consumers in their states. Read why.
- Read more about the CFPA.
Loophole-free Regulation of the Derivatives Market, and the establishment of a stock exchange-style system for derivatives that would make these now-secret trades transparent, and require that banks prove they have the funds to back their bets. Read more about derivatives.
A Strengthened “Volcker Rule” and Limits on Proprietary Trading
, as provided by the Merkley-Levin amendment.
A Cap on Bank Size, as provided by theBrown-Kaufman-Casey-Whitehouse amendment, which would put statutory limits on the size and leverage used by financial institutions. Read more about the Brown-Kaufman amendment.
A Requirement that Securities Brokers Act in the Best Interest of their Clients.
Measures to Hold Credit Rating Agencies Accountable
for contributing to the financial crisis by stamping AAA seals of approval on what were actually enormously risky products. Read more about credit rating agencies.
Regulation of Private Equity and Hedge Funds
to guard against what could be the next big bailout – with millions of jobs on the line.