May was a big month for consumer protection laws in DC. We won a significant victory in the fight against predatory lending, but we also saw Congress roll back key provisions intended to prevent another recession.

Payday Loan Rule Survives

After months of Congress threatening to repeal the Consumer Financial Protection Bureau’s payday loan rule, the deadline expired for them to do so. After calls, letters, social media, and pressure from advocates across the country, Congress did not have enough votes to overturn the rule, and so the payday loan regulations are intact.

This is a huge victory for Illinois families!

The new payday loan rule requires lenders to make loans only after they have determined whether the borrower can afford to pay it back. This is a commonsense measure that is designed to protect people from being trapped in predatory high-cost loans. Read our analysis for more information about how the payday rule will affect Illinoisans.

The work to protect the national payday loan rule is not over. Under Mick Mulvaney, the Consumer Bureau has announced that they are going to reconsider the payday rule, likely with the intention to weaken it significantly. We will continue to work with local and national partners to advocate for the preservation and enforcement of these important protections from predatory lending.

Congress Rolls Back Key Protections in Dodd-Frank Act

While May was a victory for consumers regarding payday loan protections, Congress has continued its assault on consumer protections that make the financial system more equitable for low and middle income families. This month, we unfortunately saw attacks on housing and mortgage protections through S. 2155. This bill rolls back protections in the Dodd-Frank Act, which were put in place after the Great Recession to help protect consumers from discriminatory and predatory banking practices.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank, was passed as a response to the economic recession of 2008. It brought stricter regulation and oversight to the financial industry, and it created the Consumer Financial Protection Bureau, which has since proven to be a crucial watchdog for consumers in the financial system.

S. 2155 was signed into law last week by the President and it rolls back important provisions in the Dodd-Frank Act. Some of the items us and fellow advocates are concerned about include:

• It exempts over 85 percent of depository institutions from full reporting of loan data under the Home Mortgage Disclosure Act (HMDA). HMDA is critical to uncovering discrimination in lending practices.
• It creates a new exemption for the sale of manufactured homes from mortgage lending protections. This exemption would make it easier for sellers of manufactured homes to steer customers into overpriced loans.

This could expose all of us to some of the same risky and predatory financial practices that led to the financial crisis of 2008.

Even with these setbacks, the fight for safe and equitable consumer protections is not over. We will continue to advocate for an equitable financial system at both the state and federal level. Stay tuned for more developments and opportunities to take action by signing up for our emails, checking out our take action page, and following us on Twitter.

This is a guest blog post by Kayla Villalobos with IABG partner, Center for Changing Lives.

Center for Changing Lives (CCL) believes that all people should have the economic means to achieve their goals and the vision that they have for their lives and for the lives of their families. So when we considered how we might continue to innovate our programming, the logical next step was adopting a Two Generation model, where parents and children both gain greater access to financial resources, education, and opportunities, building a strong foundation for economic security throughout generations.

In 2016, in partnership with Logan Square Neighborhood Association (LSNA), we launched our two-generation financial capability strategy to create opportunities for both parents and children to gain financial knowledge and security. In the two years following the launch, we partnered with Early Childhood Centers in the Logan Square and Humboldt Park communities of Chicago to bring group and one-on-one financial coaching to parents, educators, and children ages 3-5.

Last year, we were provided funding to begin “Money and Us” a 5-week workshop series that teaches parents and preschoolers the basics for building financial capability, with weekly topics including money identification, earning, spending, saving, and borrowing. Twenty-one families participated in the pilot of the toolkit. We met each week to work on activities together and discuss the topics and activities that they had done with their children outside of the meetings. Parents were also encouraged to work one-on-one with a financial coach on their family’s financial goals.

At the end of the five weeks, parents and kids were invited to celebrate their graduation and open a child’s savings account with $20 in seed money provided by our local partner, Liberty Bank. Studies have shown that low- and moderate-income children with college savings between $1-$499 are three times more likely to attend college and four times more likely to graduate from college than those without savings.

Families who participated in the program reported that not only did they spend more quality time with their children, they also had the language to discuss financial matters with them. By supporting parents with the language and tools to talk to their children about finances, we are supporting children’s first teachers and helping those children to better understand money, money values, and money choices. In addition, all participants reported that they will continue to add funds to their children’s savings accounts after completing the program.

Motivated by this success, we have continued to deliver “Money & Us,” in addition to financial coaching and family-friendly financial workshops, and we are now looking to grow our two-generation work even more. This year, we will be taking financial coaching to teenagers and their parents to support teens as they seek higher education, employment, and become more financially independent.

CCL believes that every person is creative, resourceful, and whole—a sentiment that extends to families of all kinds. By supporting families at multiple levels, we will continue to change not just circumstances, but lives.