KANJORSKI AND AMERICANS FOR FINANCIAL REFORM EXPLAIN WALL STREET REFORM BILL WILL BETTER PROTECT NORTHEASTERN PENNSYLVANIANS
Kanjorski Was a Leader in Congress to Write and Pass This Historic New Law
WASHINGTON – Today, Congressman Paul E. Kanjorski (PA-11), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, and the coalition group, Americans for Financial Reform (AFR), spoke with Northeastern Pennsylvanians about some of the key provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that will directly impact them and ensure they are better protected. For the past two years, Congressman Kanjorski has been working on this legislation, enacted on July 21, which provides the most sweeping financial regulatory reforms since the Great Depression. AFR is a coalition of more than 250 national, state and local consumer, labor, investor, civil rights, community, small business, and senior citizen organizations that have worked to advocate for Wall Street reform legislation.
“In July, I participated in history when I stood with the President as he signed the Wall Street reform bill, that I worked for years on, into law,” said Congressman Kanjorski. “This legislation will impact each and every one of us as it works to rein in the reckless actions of Wall Street and better protect every American. There are many pieces of this bill that will directly benefit Northeastern Pennsylvanians and all Americans, including many of the pieces of that I wrote. Specifically, the law works to end the era of “too big to fail” financial institutions and prevent future bailouts, better protect American families from abusive mortgage practices, and create a home foreclosure prevention program nationwide based on Pennsylvania’s successful initiative, among other provisions. The American public has unfortunately felt the severe consequences of Wall Street’s dire mistakes. We still have much work to do as too many people are still struggling financially as a result of the recession. This new law takes giant leaps in the right direction and will work to change that course to better protect people’s families, small businesses, and retirement savings.”
The new Wall Street reform law includes many provisions that will specifically work to help protect American families and businesses from facing much of the financial turmoil that has resulted in the past two years. Some of these provisions include:
Preventing future bailouts and end the era of “too big to fail.”
The Kanjorski “too big to fail” amendment empowers federal regulators to rein in and dismantle financial firms that are so large, inter-connected, or risky that their collapse would put at risk the entire American economic system. Therefore, American taxpayers should no longer be on the hook for bailouts, as financial companies would not be able to become “too big to fail.”
“Congressman Kanjorski has been a leader in Congress to reform the way Wall Street operates and better protect every Northeastern Pennsylvanian and American,” said Megan DeSmedt, Pennsylvania state director for Americans for Financial Reform. “The Kanjorski amendment, which Congressman Kanjorski authored, is a key provision in the new law which should end the need for future taxpayer bailouts. This amendment will protect the American public from experiencing the financial turmoil that we have felt for the past two years. This landmark provision provides sweeping authority to try to prevent such circumstances from happening again. Americans for Financial Reform applauds and thanks Congressman Kanjorski for his diligent work to protect working families and responsible businesses by cracking down on the abuses and the irresponsible behavior of big banks, credit card companies, and Wall Street insiders.”
Improving mortgage servicing standards.
For nine years, Congressman Kanjorski has been working on these issues, which first came to his attention because of predatory mortgage lending problems in the Poconos. His 2004 hearing in the Poconos on this issue led to the introduction of his comprehensive bipartisan bill in 2005 to protect consumers. Those bipartisan reforms have passed the House in 2007, 2009, and 2010, and are now law.
The new law establishes broad and comprehensive protections against abusive mortgages. It requires lenders to evaluate borrowers’ abilities to repay loans. The bill also eliminates the incentives to steer borrowers into loans they cannot afford, limits total fees to no more than five percent for almost all loans, and bans many common predatory lending practices.
“Congressman Kanjorski has been providing critical leadership in dealing with mortgage foreclosures since the beginning of this century because of the problems that arose in the Poconos that first brought this issue to his attention,” said Maureen McGrath, a resident of Monroe County and representative of the National Advocacy Against Mortgage Servicing Fraud. “In 2004, Congressman Kanjorski held a Financial Services Subcommittee hearing in the Poconos and he has continued to work tirelessly to bring mortgage and appraisal reform to the nation. I want to take this opportunity to make public all that Congressman Kanjorski has done for his constituents, for Northeastern Pennsylvania, and for the nation, and to thank Congressman Kanjorski for his support in this long uphill battle.”
Helping families to stay in their homes.
Congressman Kanjorski advocated on behalf of a national program to offer emergency bridge loans to help unemployed workers with reasonable prospects for reemployment to keep their homes. This new national initiative is based on the Pennsylvania Housing Finance Agency’s Homeowners’ Emergency Mortgage Assistance program in Pennsylvania (HEMAP), which since 1983 has saved 43,000 homes from foreclosure by helping to cover mortgage payments until homeowners find new jobs.
“I’m a single mother and a part-time student at Wilkes University,” said Jennifer Chappell, a resident of Long Pond, PA and beneficiary of HEMAP. “After returning from service in Iraq, I bought a home within my means to house my family. I started attending Wilkes University, but the VA was not yet releasing its education benefits which I should have been receiving, and as a result the expenses for school quickly added up and I was unable to pay my mortgage. I applied for and received a loan through HEMAP which made it possible for my daughter and me to stay in our home and avoid foreclosure. I am now able to work and go to school at the same time. Without HEMAP, my child and I would have been out of a home. I greatly thank Congressman Kanjorski for advocating to make a national program similar to HEMAP. After experiencing such a frightening situation myself, I have no doubt that such a program at a national level will help many others who face losing their homes.”
The Wall Street reform law creates a new independent watchdog, housed in the Federal Reserve, with the authority to ensure that American consumers get the clear, accurate information they need to shop for mortgages, credit cards and other financial products. This new consumer protection bureau will protect Americans from hidden fees, abusive loan terms, and deceptive practices.
Protecting small businesses from unreasonable fees.
The new law creates new protections for small businesses because too many of them are facing out-of-control swipe fees that banks and other credit and debit card issuers charge these businesses for debit or prepaid-card purchases. As a result, small businesses stand to save billions, as debit swipe fees amount to about $20 billion a year.
Investing in local communities.
The law provides $1 billion through the Neighborhood Stabilization Program to states and localities to combat the ugly impact on neighborhood of the foreclosure crisis — such as falling property values and increased crime — by rehabilitating, redeveloping, and reusing abandoned and foreclosed properties.
Assisting people with personal financial knowledge.
The Wall Street reform law allows consumers free access to their credit score if their score negatively affects them in a financial transaction or a hiring decision. It also gives consumers access to credit score disclosures as part of an adverse action and risk-based pricing notice.
Congressman Kanjorski wrote many other key provisions included in the Wall Street reform law which will better protect investors and enhance the powers of securities regulators, register and regulate hedge fund managers, reform the operations and regulation of credit rating agencies, and create a Federal office focused on insurance matters.