As we all know, Congress adjourned for the summer recess on July 31st. Even its critics must concede that the final weeks before recess were busy ones. Passage of the consumer law mentioned above was great news for consumers and there was also lots of other noteworthy consumer legislation passed. We received a brief legislative update from the National Association for Consumer Advocates (NACA) which gives a pretty good rundown of what is going on from a consumer perspective.

ARBITRATION

NACA is at the forefront of the fight against binding mandatory arbitration – facilitating the Give Me Back My Rights Coalition, coordinating all visits to Capitol Hill, and lobbying individual Congressional offices on the issue of arbitration. Presently, there are three major anti-binding mandatory arbitration bills before Congress. Two are topic specific and the third is broad sweeping. The first two bills are the Fairness in Nursing Home Arbitration Act (H.R. 6126, S. 2838) and the Automobile Arbitration Fairness Act (H.R. 5312). The strategy behind introducing these two bills is to chink away at binding mandatory arbitration one topic at a time. The broader bill, that would ban binding mandatory arbitration from all consumer, employment, and franchisee contracts, is the Arbitration Fairness Act (H.R. 3010, S. 1782). Currently, all three arbitration bills have successfully made it out of the House Judiciary Subcommittee on Commercial and Administrative Law. The Fairness In Nursing Home Arbitration Act was the only bill that made it before the full Judiciary Committee before Congress adjourned for the summer. It was successfully voted out of the Judiciary Committee by a 17 to 4 vote and now can go to the full House for approval. The Automobile Arbitration Fairness Act was put on hold by Congressman Conyers (D-MI), the Chair of the Judiciary Committee until September. As for the Arbitration Fairness Act, we are still building support. To date, there are 103 co-sponsors to the bill. NACA is working with Congressman Hank Johnson (D-GA), the sponsor of the bill, to address the moderates’ concerns about the bill.

In terms of the Senate side, the Fairness In Nursing Home Arbitration Act has bi-partisan support and is expected to go before the Senate Judiciary Committee in September. The Arbitration Fairness Act is not scheduled for mark-up and we are still trying to obtain co-sponsors. The Automobile Arbitration Fairness Act has not been presented in the Senate. Senator Feingold (D-WI) has said he wants Senator Grassley (R-IA) to co-sponsor it with him, but, to date, Senator Grassley, a staunch supporter of exempting the auto manufacturers from the Federal Arbitration Act, has not been inclined to do so. NACA is planning a major arbitration lobby day for February / March 2009 (date yet to be decided) to coincide with the re-introduction of all three bills. NACA, along with other members of the Give Me Back My Rights Coalition, are planning on bringing victims of binding mandatory arbitration to the Hill to tell their story.

CREDIT CARDS

The Credit Card Bill of Rights (H.R. 5244) is the major credit card legislation on the Hill right now. Its intent is to restore fairness to the credit card marketplace by: (1) prohibiting card issuers from applying rate hikes retroactively to prior balances borrowed at a lower interest rate unless the borrower is more than 30 days late with their payment, has a promotional rate that ends, or receives a variable rate increase; (2) preventing credit card companies from piling on the debt that consumers owe by requiring them to payoff balances with lower interest rates before paying down balances with higher interest rates; (3) prohibiting unfair and hidden interest rate charges on balances repaid during the grace period; and (4) ending unfair late fees for on-time payments. The mark-up of the Credit Card Bill of Rights occurred on July 31, 2008. At that mark-up Congressman Castle (R-At Large DE) introduced a voluntary resolution that would substitute the Credit Card Bill of Rights with a resolution supporting the Federal Government’s newly proposed regulations. Some moderate Democrats were considering the resolution, but in the end, the House Financial Services Committee successfully recommended the bill out of Committee 39 to 28, with every Democrat and two Republicans (Chris Shays R- CT and Walter Jones R-NC) voting in favor of it. This was a major victory for consumers and a major, rare, defeat for the credit card industry. The Credit Card Bill of Rights is expected to go to the House floor in September, where it stands a good chance of passing. Though it will not get through the Senate this year, the Credit Card Bill of Rights is the strongest piece of consumer legislation to pass the Financial Services Committee in many years.

FORECLOSURE PREVENTION

As you all know, this term Congress passed major housing legislation. Although the bottom line remains that the housing legislation’s effectiveness in saving homes from foreclosure will be limited because of its voluntary nature, there are nevertheless some useful provisions within the package. The following are some of the major subjects covered:

• Higher Loan Limits – Raises the GSE, FHA and VA single-family loan limits on a permanent basis;
• GSE Regulatory Reform – Increases regulation of Fannie Mae, Freddie Mac and the Federal Home Loan Banks (the GSEs) by creating a new regulator and regulatory requirements;
• GSE Stabilization – Establishes several new powers and authorities to stabilize the GSEs in the event of financial crisis;
• Affordable Housing Trust Fund – Creates, from assessments on the GSEs’ businesses, a fund to help prevent foreclosures and facilitate affordable housing;
• FHA Rescue Plan – Authorizes a new FHA “Hope for Homeowners Program” to refinance existing borrowers into fixed rate FHA mortgage products;
• Licensing – Encourages a nation-wide licensing and registry system for loan originators by setting minimum qualifications and assigning HUD responsibility for establishing requirements for those states not enacting licensing laws;
• FHA Modernization – Modernizes FHA programs;
• Active Service Members – Extends stays of foreclosure and legal proceedings from 90 days to nine months, and extends the six percent mortgage rate cap for one year after active duty;
• Redevelopment of Abandoned and Foreclosed Homes – Authorizes $4 billion in block grant funds for states to purchase and redevelop foreclosed properties;
• Counseling – Authorizes funds for the Neighborhood Reinvestment Corporation (NRC) for foreclosure mitigation activities;
• Truth in Lending Act (TILA) – Adds new mortgage disclosure requirements under TILA;
• Veterans Matters – Provides home improvement benefits for the disabled;
• Public Housing Authorities – Reduces regulatory requirements for smaller PHAs;

Tax Incentives – Establishes a range of tax incentives, including a first-time homebuyer tax credit, and expands the Low-Income Housing Tax Credit (LIHTC);

Real Estate Investment Trusts (REITs) – Loosens certain restrictions on REITs; and

Public Debt Limit-Increases the Federal debt limit to $10.615 trillion.

The above bullets were directly taken from a key points summary produced by the Mortgage Bankers Association. Anybody who would like a copy of the full summary can get a copy from NACA.

Congress will be back in session starting in September. There will be a number of issues waiting for them that consumers will be interested in. If you want to find out more about pending pro-consumer legislation you can go to www.capwiz.com/nacanet. You might also want to contact your U.S. Senators and House members to ask for their support on consumer legislation in the future.

Source: NACA