Legislative Updates from National Association of Consumer Advocates

February 21, 2010

The following post is excerpted from an email alert from the National Association of Consumer Advocates (NACA).

These are a few of the current legislative issues NACA is working on:

Forced Arbitration

NACA is still working hard to get the Arbitration Fairness Act (AFA) and the Fairness in Nursing Home Arbitration Act out of the House Judiciary Committee.

The AFA now has 108 co-sponsors! We are pushing Congressman Steve Cohen (D-TN), the Chairman of the House Judiciary Committee’s Commercial & Administrative Law Subcommittee, to schedule a vote on the bill during the next several months. Subsequently we will push for a full vote in the Judiciary Committee. The vote in the House is our first priority; however, NACA continues to lobby the Senate as well, to garner support and build momentum.

NACA is also working hard to preserve the proposed language in the Consumer Financial Protection Agency Act of 2009 that addresses forced arbitration. The version that passed the House and is similar in the Senate, enables the Consumer Financial Protection Agency (CFPA) to restrict and/or ban the unfair practice of forced arbitration from financial contracts. In the House there were attempts to strip such language, and we anticipate that we will again be called upon to fight to maintain the language in the Senate.

Homeownership / HAMP

Yesterday, the Treasury Department released January data for the Administration’s Home Affordable Modification Plan (HAMP).

The Administration’s current plan is still clearly not working as we see foreclosures across the U.S. continue to soar. After 11 months, only one in ten homeowners participating in the HAMP program have had their mortgage permanently modified.

In late 2009, NACA and NCLC conducted a survey about the occurrence of foreclosure sales in violation of HAMP. Over 100 NACA members from 24 states participated. The results indicated that foreclosure sales were still a significant problem and in need of a substantial policy solution.

Two weeks ago, NACA organized a call with its Institute for Foreclosure Legal Assistance (IFLA) grantees to discuss the shortcomings of the HAMP program and what they are seeing in the field. NACA is presently drafting a letter to Congress and the Administration explaining the IFLA attorneys’ concerns with HAMP and to set forth recommendations on what is needed to make the program work for homeowners facing foreclosure.

Consumer Financial Protection Agency

As you know, the pending financial reform legislation that would rein in many Wall Street abuses and create an independent CFPA is still being negotiated in the Senate.

NACA just learned that Senator Chris Dodd (D-CT), the Chairman of the Senate Banking Committee, will be releasing a new draft of his proposed financial reform package next week. The fight right now is about the very structure of the CFPA and whether it will maintain independence.

NACA has been meeting with Senate offices to convey that independence in regards to the CFPA requires the agency be independently funded, have independent rulemaking authority over both banks and non-banks, the head of the agency be independently appointed by the President for a specified term and have independent managerial decision making power, and that the agency have examination and enforcement authority that is not subject to approval or veto.