...poor. Yes, in allegedly "reforming" the banking sector, Dodd-Frank sticks it to poor citizens.
Don't believe The Motley Monk?
Five years' experience with the Dodd-Frank banking "reforms" indicates that consumers, and especially low-income consumers, haven't fared so well under the new "safeguards" designed to protect them, like the Consumer Financial Protection Bureau (CFPB).
According to Forbes, despite what the CFPB's Director says, the facts are that:
- Low-income citizens, young people and minorities in particular, have seen a dramatic drop in the financial products and services available to them since the banking crisis of 2008.
- According to the Federal Deposit Insurance Corporation, nearly 1M citizens were shut out of mainstream banking completely between 2009 and 2011.
If that's not bad enough, Forbes notes that as banks have boosted capital ratios and tightened underwriting standards as required by Dodd-Frank, $70B in credit cards have been cut during the past 3 years. This cut has disproportionately impacted low-income families, with 40% reporting that their credit cards have been canceled, limits reduced, or having been denied a new card.
Priced out of mainstream banking by these "reforms," what are low-income citizens to do?
As could have easily been predicted, low-income citizens are forced to utilize alternative finance sources. For example, "payday lenders" and check cashers. However, payday lenders can charge anywhere from $15 to $100 on average to borrow $100 for two weeks. That's an APR of 391%! The charge rises from there if the money isn't or can't be paid back on time.
Remember when President Obama signed Dodd-Frank, touting how it would "reform" Wall Street and "protect" consumers?
Well, the facts are rolling in. Like other promises the President has made (for example, Obamacare bending down the medical cost curve), Dodd-Frank has punished Wall Street (yes, that was the objective) but it has done so at the expense of low-income citizens, making mainstream banking a luxury service provided for the middle and upper class citizens.
So much for liberal Democrat social justice. When will people finally wake up and see liberal Democrat social justice, and in this case Dodd-Frank, as the chimera it really is?
Let the discussion begin...
To read the article in Forbes, click on the following link:
"Dodd-Frank's Costs Will Be Paid For By Low-Income Bank Customers."