The Dodd-Frank vote stands in the way of helping working class and low-income families

For decades, owning a home has been the number one way for low-income Americans to rise out of poverty, yet Congress has passed a bill to rollback strict financial rules for banks under Dodd-Frank that have protected consumers since the Great Recession in 2008.

This vote has changed the rules, resulting in working class whites and people of color being blocked from generating their wealth through homeownership.

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Today a plethora of things help blue-collar, average American families obtain responsible mortgage loans. The Community Reinvestment Act and various fair lending laws protect us from having the banks lend only to the rich or discriminate on the basis of gender, race or disability.  The VA helps those who have served this country access reasonably priced mortgage loans. Fannie Mae and Freddie Mac have done more to expand access to homeownership than any institution in the country. FHA, in particular, helps working-class Americans get homes by lessening the insurmountable down payment needed for a home loan. (Fannie Mae, Freddie Mac and FHA are agencies backed by the federal government to guarantee and ensure the availability of mortgages to low-to-moderate-income families.)

 

Meanwhile, Dodd-Frank has been damaged and these other programs are under attack as well. This is the primary reason we have a 50-year low in the percentage of Americans who own homes. Even the institution created to prevent financial abuse and injury to average Americans, the Consumer Financial Protection Bureau, also is under the gun.

Before the recession and the predatory lending practices that brought our economy to its knees, applying for a home loan was simple. Virtually anyone that was credit worthy and had some level of down payment could become a homeowner. Today, mortgage financing is much harder for working class families to obtain, and people of color face discrimination in this housing process. Most Americans who acquired the first home in their lineage would not have been successful if the rules today applied to them then. Also, current unemployment rates are masquerades, belying the fact that many of these new jobs do not pay a livable wage and come with no benefits. Nearly half the people receiving food stamps are working at some job. The continued braggadocio surrounding low unemployment rates hides the growing income inequality in our society.

No greater stimulus to our national economy exists than helping people become homeowners. When a credit-worthy person buys a home, they hire people in the construction trades; they buy appliances; they buy furniture; they hire landscapers and more. Jobs of all sorts are sustained and promoted through out home buying and owning that home.

The fox is in the hen house, representing the 1 percent of the richest Americans and destroying other opportunities to build wealth and share in the economic progress of our nation. We will never be great again if we do not address this problem.

Is this the kind of America we are seeking, with fewer and fewer of our citizens having sustainable income or a home to call their own?

According to the Brooking’s Institute, in 1949, when I was born, there was an 80 percent chance that I would become more financially successful than my parents. If you were born in 1955 you had a 70 percent chance that you would do better than your parents. A person born today has a less than a 50 percent chance that they will do better financially than their parents.

Is this the promise that was made to average Americans, to their children?  Is this what we expect from our political leaders? Closing the wage gap and expanding home ownership should be on the agenda of any candidate who claims to support the working class or the American Dream. It's a test.

Ask candidates where they stand and what they will do to help more Americans earn a living wage, earn more than their parents and earn enough that they can save for a down payment, qualify for a mortgage and afford it.

Get up, stand up for your rights and make a statement – throw the bums out until we find people who truly can represent us, not only in word, but also in deed.

John Taylor is President and Founder of National Community Reinvestment Coalition.