Financial Reform
What consumer debt in Oregon tells us about the potential of “mini CFPBs”
Symone Jackson
February 1, 2019
Equitable banking for all
Policy Advocacy
The banking system rules of the game must change. The status quo favors profit maximization above all else and harm caused by banks is seen as the cost of doing business. This damage disproportionately affects marginalized communities, particularly communities of color and lower income people. Using a racial, gender, and economic justice lens, we seek regulatory reform at federal and state levels that incentivizes positive social and environmental impact, enacts real penalties for harm, and disciplines the supply chain of financial services.
A California CFPB
We defend a fair and independent Consumer Financial Protection Bureau (CFPB) at the federal level, and are laying the groundwork to establish a California state-level CFPB. The CFPB was created after the 2008 financial crisis to bring fairness and transparency to consumer financial services. It is the only financial oversight agency mandated to put the interests of people served by the financial industry first, and its sole mission to protect them against abusive financial practices must be preserved.
Since its establishment, the CFPB has returned roughly $12.4 billion to over 31 million people. We are laying the groundwork for a state-level CFPB in California with Assembly Bill 1048 (Limón). California can lead the nation with a consumer financial protection agency at the state level to monitor financial products and practices, and bring justice to the millions of bank customers it serves. A federation of state-level CFPBs could be encouraged and coordinated at a national scale.
Strengthen the Community Reinvestment Act
As the OCC considers changes to CRA, which was established as a direct response to racist redlining, we advocate for equitable reform that explicitly includes racial and environmental equity criteria and that does not leave low income communities behind.
CRA reporting should also align with CDFI requirements and banks should be mandated to invest more deeply in CDFIs, who hold essential knowledge and expertise in local community development.
CDFI Funding
We advocate for a fully funded Community Development Financial Institution Fund at minimum $300 million. CDFIs are mandated to invest in low to moderate income communities, creating tangible positive impact in job, affordable housing, and small business creation – but the Fund is under attack. In addition to funding, we push for stricter standards that meaningfully drive capital to underserved areas and communities.
We engage in efforts to promote the CDFI movement and to build CDFI capacity to measure and assess the social and environmental impact of their lending.
Public Banking
We support new models for banking that are aligned in the public interest, including the creation of public banks. We engage in national-, state-, and local-level organizing for public banks.
We are active members of the California Public Banking Alliance, a coalition of public bank advocates working to create socially- and environmentally-responsible public banks that are democratically governed. As a community development bank owner, we would partner with these public banks to increase their capacity to serve unmet needs. In 2019, we helped to pass the California Public Banking Act (AB 857) and in 2020, we laid the groundwork for a California state public bank with AB 310.
Perspectives
