Community Development Pros Discuss Consumer Finance Policy Change at Cleveland Fed Policy Summit

Nearly 250 community development professionals attended the Federal Reserve Bank of Cleveland’s Sixth Annual Community Development Policy Summit, Consumer Finance: Crossing the Divide, on June 11 and 12.

More than 40 presenters focused on such topics as getting foreclosed properties back into circulation; legislative and regulatory responses to burdensome household debt; innovative financial products and services; asset-building beyond homeownership; and the effectiveness of financial education.

"Our aim in holding the Policy Summit is to convene bankers, policymakers, community development practitioners, and academics for meaningful policy conversations outside of Washington, D.C.," says Ruth Clevenger, vice president and Community Affairs Officer at the Cleveland Federal Reserve Bank. "We feel it's important to have such discussions locally, since our summit focuses on issues – such as consumer finance or concentrated poverty – that have a significant impact on the individuals and communities here in our region. Our hope is that these knowledge-sharing forums will help inform policy decisions going forward."

Randall Kroszner, a member of the Board of Governors of the Federal Reserve System, opened the Policy Summit on Wednesday, June 11. His remarks focused on the challenge to policymakers "to strike the right balance – that is, to find ways to empower and protect consumers without diminishing access to credit and hindering future innovation."

For example, "with the increased complexity of mortgage loans and credit cards in recent years, there has been great concern about the need for more effective disclosure and increased consumer protection in these transactions," he said.

He noted specifically the Federal Reserve’s proposed amendments to the Home Ownership and Equity Protection Act. Expected to be finalized next month, the rules address such concerns as lenders’ consideration of the borrower’s ability to pay, prepayment penalties, and the impact on consumers when lenders fail to establish escrow accounts for taxes and insurance.

Today’s keynote speaker, Kelvin Boston, executive producer and host of PBS’s "Moneywise," concluded the event with an inspirational address urging participants to help friends, family, and policymakers to use knowledge, action, and faith to overcome financial fears.

"Each and every one of you is an economic freedom fighter," he said. "Use the current economic situation as a teachable moment to urge policymakers to establish sound economic policy and to make financial education mandatory."