Financial Regulation: Protecting Black Consumers and Creating Pathways to Jobs
Much like health care reform, the Dodd-Frank Wall Street Reform and Consumer Protection Act is a landmark piece of legislation created under Obama’s watch. While it’s by no means perfect, it will have some real impact on the financial future of African Americans, who, as we all know by now, have been hit by the recession harder than anyone.
First, the law established the Bureau of Consumer Financial Protection. The only federal agency of its kind, the organization is tasked with ensuring the fairness of things like credit card plans, mortgages and student loans, and it has the authority to establish new restrictions on financial institutions as it sees fit.
What’s more, the bureau will have lots of power over the lending and mortgage industries, thus giving it the controls necessary to prevent the sort of predatory lending that has resulted in black and Latino borrowers paying significantly higher interest rates than their white and Asian counterparts. Auto loans and payday lenders, which frequently take advantage of communities underserved by normal financial institutions, also fall under the bureau’s purview.
Besides protecting America’s most vulnerable consumers, Wall Street reform also includes efforts to open up the financial industry to minority workers. An underreported section of the law gives the federal government the right to end contracts with firms that don’t show a “fair inclusion” of ethnic-minority and female staffers. In 2009 just 5.6 percent of the nation’s securities, commodities and financial-services sales agents were African American. By improving those numbers, the administration hopes to influence a Wall Street culture that has often looked at minorities as little more than susceptible cash cows.
Cord Jefferson is a staff writer at The Root. Follow him on Twitter.