Middle class must fight to save rules that protect consumers

The grim truth in suburban Philadelphia is that home values haven't rebounded from the 2008 mortgage crisis. Many owners are still underwater, meaning they owe more on their homes than they could earn on the market.

Only a handful of Pennsylvania towns, including Narberth and Malvern, have had robust increases in home values. Sharon Hill, Darby, and others are tanking.

New Jersey, which leads the nation in foreclosures, is doing even worse. Home values rose just 3 percent over 10 years in Haddonfield, didn't budge in Haddon Heights, and slid everywhere else, according to an analysis by Drexel University's Lindy Institute for Urban Innovation.

Instead of helping, President Trump and the Republican-controlled Congress want to dismantle the few protections middle-class families have against financial ruin. They've concocted one of the worst lies flooding out of Washington with a bill misleadingly called the CHOICE Act. That's an acronym for Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs.

In fact, the bill only creates hope for the investors and entrepreneurs who stuff politicians' campaign war chests with cash. As for consumers, it puts them at a distinct disadvantage.

The bill would gut the Consumer Finance Protection Bureau's authority to protect consumers and the overall economy from returning to the same conditions that led to the 2008 crash. The CFPB has proven its worth. In its seven years, it has returned more than $11 billion to almost 30 million consumers ripped off by credit card companies, banks, debt collectors, and others. That's what makes it dangerous to unscrupulous lenders.

Irresponsibly, the CHOICE Act releases lenders from requirements to ensure borrowers pay back loans. That will allow lenders to profit by collecting their fees up front. But when unqualified borrowers don't pay up, taxpayers could be forced to bail out the reckless lenders.

The bill would keep the public in the dark about a downward spiral until it's too late. Lenders won't have to disclose whether they are redlining, which is the illegal practice of refusing to write reasonable mortgages in neighborhoods they deem to be on the skids. Typically, such neighborhoods are transitioning from white to black homeowners. Redlining leads to declines in investment and property values.

The legislation would protect abusive lenders by hiding consumer complaints from loan applicants. The bill would also bring back widespread usage of pay-day and car title loans, which can carry effective interest rates that even a loan shark wouldn't demand. The bill would erase the Volcker Rule, which prohibits banks from using their own money for risky investments and bans them from owning large stakes in hedge funds or private-equity firms.

The false choices offered by this legislation reach a level of cynicism that makes you wonder how long the middle class will take it before standing up to fight. People need to let their senators and representatives know the middle class still needs protection from greedy, reckless lenders. Tell them to vote down this bad bill.