Department of the Interior, Environment, and Related Agencies Appropriations Act, 2018
Floor Speech
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Mr. Chairman, my amendment simply preserves the Consumer Financial Protection Bureau's independent funding and ensures that it is adequately funded. That is essentially what this is all about. This is very clear. The sides on this couldn't be more clear. My amendment is one of many this week, but I hope that people pay special attention to how folks vote on this particular amendment.
This amendment is a clear litmus test. If a legislator wants to supportthe work of the Consumer Financial Protection Bureau, if they want to support the work of $11.5 billion being returned to consumers, they should vote ``yes.''
A ``yes'' vote on my amendment means you want to protect Americans from fraud, deceptive practices, and rip-off schemes.
A ``yes'' vote means you want banks, debt collectors, credit reporting agencies, payday lenders, and other finance companies to be held accountable if they rip off consumers.
A ``yes'' vote means that you want honest and fair-dealing firms in the financial services space to be rewarded for their good work and for people who take advantage of consumers to be punished.
We want to keep good companies good. How can you do that if good and bad get treated just alike?
We need the CFPB. My amendment asks that you stand with Ari Booras, for example. As you may have seen on ``CBS Sunday Morning'' a few weeks ago, Harry Booras contacted the Consumer Financial Protection Bureau's consumer complaint center for help. His teenage son, Ari, joined the Army, just like mine did, and bought a used truck at a car dealer near his base.
My boy was 18 when he went to the Army. Ari was the same age, I imagine. Yet that desire was taken advantage of. Teenage Ari joined the Army and bought a used truck at a car dealer near the base. The loan was way more than this private could possibly afford, with an extensive extended warranty and 18.5 percent interest.
Private Booras would have paid three times more than Blue Book value for this $11,000 truck. He would have paid three times more. Yet he can't afford three times more. He is just a private trying to serve his country.
The Consumer Financial Protection Bureau got Private Booras and 50,000 other servicemembers out of these predatory loans that ruin their finances and cause enormous stress in their lives. We need servicemembers thinking about protecting the country, not how to fight off some predatory lender.
My amendment asks that you stand with Samir Hanef from Durham, North Carolina. Samir was one of more than half a million people who was wrongly charged for auto insurance when he took out a loan to buy a Honda Civic.
Samir, a social worker, already had insurance, but Wells Fargo charged him and 20,000 others, customers, added insurance that made them miss payments. This led to their cars being repossessed in some cases.
The numerous scandals at Wells Fargo--the forced insurance, fake accounts, overcharges at mortgage closing, signing customers up for life insurance without their consent, and other fraudulent practices-- are coming to light because of the work of the Consumer Financial Protection Bureau and its consumer complaint office. They need independence.
Mr. Chairman, I reserve the balance of my time.
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Mr. Chairman, my amendment preserves the CFPB's authority to protect people who live in manufactured housing, manufactured housing buyers.
I am lucky to have the National Manufactured Home Owners Association based in my district. For the Record, they have written an excellent letter on behalf of this amendment, which I will include in the Record.
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I am also very proud of the residents of the Park Plaza, a manufactured home resident-owned community in my district.They tell me that being steered to high-cost loans makes homeownership more costly for families. Before Dodd-Frank and the creation of the Consumer Financial Protection Bureau, the manufactured home loan market was notoriously predatory.
For example, a story in The Seattle Times, which I recommend Members read, tells the story of Kirk and Patricia Ackley, a construction worker and a Walmart employee in Washington State.
More than a decade ago, they bought a new manufactured home big enough for their children and room to care for Patricia's dad, who had dementia. But their dream became a nightmare when the promised 7 percent interest rate was raised to 12.5 percent.
This family faced crisis when this raised their monthly payment from $700 to $1,100. They had already invested $11,000 to build the concrete foundation for their new home. They took the loan, but it destroyed their finances and nearly cost them their marriage. The home was repossessed.
A 2015 investigation by the Center for Public Integrity and The Seattle Times interviewed more than 280 customers of Clayton Homes. One person they interviewed was a member of the Navajo Nation. She said she learned about Clayton on Navajo radio.
The ad recommended that she talk to a specific Navajo-speaking salesperson at a lot outside of the reservation. He told her that Vanderbilt Mortgage was the only source of finance for homes on the reservation. He didn't tell her the truth and overcharged her.
Now it is illegal for a salesperson to steer buyers to high-cost loans because of new rules from the Consumer Financial Protection Bureau. But section 915 of the bill weakens those protections. Loans with high interest rates can be especially devastating to buyers of mobile homes since houses often depreciate quickly.
A buyer with a high rate will still owe a large sum for many years on a home that can be almost impossible to sell or finance. That is because the value of the home can fall below the loan balance.
Opponents of my amendment say that they want to help manufactured home buyers. That is a good thing. Yet none of them have cosponsored H.R. 515, which would provide low-cost loans to owners of outdated mobile homes so they can buy ENERGY STAR homes, which would reduce their bills and save energy. None of them have joined me to cosponsor the Frank Adelmann Manufactured Housing Community Sustainability Act, which helps residents of mobile home communities form a cooperative and buy the land that they live on. Or what about H.R. 3583 that gives manufactured homeowners located in communities the same tax benefits as those who own their own land?
I have introduced these bills to try to help people who live in manufactured homes. We do and must stand with them because this is an affordable, and sometimes quality, housing option for people, and yet manufactured homeowners support my bills.
Right here we have the National Manufactured Home Owners Association, which has said very clearly that my amendment is a good one.
There is a way to help manufactured homeowners that does not involve overcharging them. There is a way forward to help owners of manufactured housing without helping Clayton Homes and its affiliates make more money off of them.
And let's be clear, nearly no other lender benefits to this change to section 915. Ninety-one percent of the high-cost loans come from lenders owned by Clayton. The industry's second largest mobile home lender, Wells Fargo, didn't have a single loan in the high-rate pool in The Seattle Times study.
Protect manufactured home buyers. Support my amendment No. 200.
Mr. Chairman, I yield back the balance of my time.
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Mr. Chairman, my amendment is to preserve the Consumer Financial Protection Bureau's authority to regulate small-dollar loans.
Sometimes people need access to more money quickly. We know that. Your car breaks down, your refrigerator dies, or your kid breaks a leg at a soccer game and you get hit with an unexpected health bill. Life happens sometimes, not on a plan. We get that.
Unfortunately, too many people--about half of families--do not have the adequate savings for the cushion. Right now, Mr. Chairman, about 63 percent of all Americans report that they do not know what they would do if hit with an unexpected $500 bill.
If they take out a payday loan or a title loan, they can fall into a cycle of debt, and many people do. Instead of getting one $500 loan, most people get a repeat loan of 6 to 10, on average, paying additional fees each time, at 400 percent interest. So a $500 loan could cost thousands of dollars.
More than 80 percent of the payday industry's revenues are generated by repeat borrowers, not one-and-done, Mr. Chairman.
That is why the Consumer Financial Protection Bureau prioritized improving the small-dollar loan market. Unfortunately, language in this bill would stop the Consumer Financial Protection Bureau from moving forward to rein in abuses in the payday loans, auto title loans, and other similar debt traps.
The Consumer Financial Protection Bureau has documented through extensive study how payday lending traps borrowers in a cycle of debt: one in three auto title loans in default, one in five borrowers using auto title loans have their cars repossessed. That is 20 percent.
The Consumer Financial Protection Bureau is close to releasing guidance to improve this market. Its efforts are supported by a broad network of civil rights and consumer advocates, as well as faith-based leaders opposing predatory lending.
I am really proud of Exodus Lending in my district. The Minneapolis Lutheran congregation recognized that too many of their congregants were stuck in debt traps. Their parishioners had jobs. They had bank accounts. But when they took out small-dollar loans, it gave lenders access to their bank accounts, which stripped out a third of their paycheck every 2 weeks. Instead of one loan, they ended up getting ten because they could not repay the first loan.
So the Lutherans, working with Sunrise Banks, established an alternative. They made more than 100 loans to people stuck in debt traps. Other communities are creating small-dollar lending alternatives through employer assistance programs with for-profit partners.
My amendment would simply allow the CFPB to finalize its rulemaking so cool ideas like these, to help people out of debt, could go forward.
We need strong Federal standards so people can have access to small loans on a quick basis without falling prey to debt traps.
Research from the Center for Responsible Lending shows that payday lending drains $3.4 billion a year nationally from consumers' pockets-- money that is no longer available to help pay for medicine, new tires, or any kind of emergency.
The CFPB is very close to putting forth a better way to get private sector lenders involved. We could have a $300 loan with $60 fees that someone can repay.
Let's allow the CFPB to move forward to better small-dollar loans.
Please support my amendment.
Mr. Chairman, I reserve the balance of my time.
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Mr. Chairman, let's be clear, to get a payday loan, you have to have a bank account and a job. We are not talking about the unbanked. We are talking about people who run into a short-term financial crisis, they go to a payday lender, but the amount of the fees are so high that they have to borrow money to pay the money back, and they end up getting in a cycle of 6 to 10 loans that they have to continue to take out, which drains money from their finances. They lose bank accounts because of payday loans.
We are saying: Let the CFPB allow the regulatory process, the rulemaking process, to go forward. Let's not chop it off, let's not stop it, and let's see what we can find out. People in my district have come up with some pretty innovative ways to go around the high-cost, high-APR payday lending scam.
But if we just say, No, we are just going to take authority away from the CFPB, what we are really doing is subjecting Americans to the payday loan industry. Now, I don't want to take support from those guys, so I am happy to stand up here and say: Vote for my amendment.
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