Rep. Waters: $1.3 trillion HEROES Act is designed to address CARES Act oversights

26th May 2020   ·   0 Comments

By Ryan Whirty
Contributing Writer

As the government continues providing immediate financial relief to Americans across the country during the COVID-19 pandemic, officials and community leaders must also press to reform and correct the systemic inequities and biased structural flaws that have once again caused an economic crisis to disproportionately affect people of color, U.S. Rep. Maxine Waters, D-Calif., said last week.

While participating in a virtual town hall sponsored by the Center for Responsible Lending on May 18, Waters, the chairwoman of the House of Representatives’ Financial Services Committee, said that the $1.3 trillion HEROES Act recently passed by the Democratic-controlled House and currently being mulled over by the Republican-led Senate, is designed to address some of the kinks and oversights in the CARES coronavirus crisis recovery legislation passed in March.

Waters noted that billions of the dollars allotted in the CARES Act to help small businesses actually initially went to larger financial institutions and corporations, and that much of the benefits of that March legislation was sufficiently targeted and given to people of color, the poor and minority communities.

“We know that with the first rollout of the CARES Act,” she said, “that the bigger financial institutions took care of their concierge clients, their society clients, and so we have many in [the minority] community that were absolutely disappointed, who stood in line, and even got numbers, waiting to be called, to be contacted, only to find out that the money had dried up and they were left without the funding.”

The congresswoman said that she and some of her peers “called out” those responsible for diverting financial help toward the wealthy and away from those who needed it most, and that the situation is being rectified and adjusted, including with the provisions of the HEROES bill.

Waters said she and some of her colleagues have put forth emergency legislation that would allot another $60 billion to community, minority-owned banks and credit unions, and the new HEROES bill includes $10 billion to registered Minority Depository Institutions and Community Development Institutions.

Waters also deplored the recent decimation of the Consumer Financial Protection Bureau, which was established as part of the financial reforms adopted during the Great Recession, by the Trump administration and the GOP, which Waters said are hostile to the CFPB because it favors the rights and well-being of average Americans, including disadvantaged communities, instead of rich corporations.

And now, she said, the coronavirus crisis has exposed the damage caused by the weakening of such consumer protection efforts. She said the centerpiece of the HEROES Act is the rental protection that would be given to not only the renters themselves, but also the millions of small property owners and rental owners who only have a handful of units.

Waters said that those such property owners aren’t part of huge corporations, but are average folks who have a mortgage to pay on their smaller rental units. She said that while the CARES Act helps such owners, as well as renter residents themselves, with temporary relief, it might not adequately address the long-term negative effects of delayed rent payments and mortgage repayment that will inevitably still be there after the temporary economic-relief money goes away.

Waters said those foundational reforms contained in the HEROES legislation take much needed steps toward foundational change, and it’s why the Republican Party will fight tooth and nail against such positive positions, especially because they’ll balk in knee-jerk fashion against the $3-trillion-plus price tag.

“The Senate is going to oppose a lot of what we want,” Waters said, “but if we get people using the Internet and all of the systems we have to contact all of our legislators daily, hourly and demand that what’s in this bill that’s been put forward.”

Waters said that at one point during the economic legislation debate being held since the COVID-19 pandemic began, House Speaker Nancy Pelosi, D-Calif. asked that Waters and other minority Congressional members participate in a conference call with Secretary of the Treasury Steve Mnuchin, leading to surprisingly large success.

“We all got on the line together, and Nancy said she was amazed at what we were able to do by going directly at [Mnuchin] about what we wanted to see changed [in the recovery effort],” Waters said.

Waters said another key facet of the coronavirus economic recovery effort that is inextricably intertwined with the financial fallout is the dire and disproportionate lack of sufficient medical attention and prevention for people of color.

As a result, she said, any economic relief packages must be coupled with the type of wide-ranging health care reform, support and funding that can address the chronic health disadvantages that contribute to the economic disparities felt by people of color.

She said the gutting of Obamacare by the Trump Administration has had a devastating effect on minority death rates during the pandemic, requiring progressives to “be prepared to fight on all fronts [with COVID-19 fallout].”

“We’re dying from these physical diseases,” said Waters, whose sister recently died from the coronavirus. “Our people are dying from COVID-19 with pre-existing [medical] conditions that should have been cared for if we had comprehensive health care for everybody.”

The other members of last week’s Center for Responsible Lending virtual town hall also provided critiques of the historical economic system in America and gave suggestions and advice for the financial recovery effort that can be tailored to specifically help African Americans and other people of color. The forum was moderated by April Ryan, White House correspondent for American Urban Radio Networks.

CRL executive vice president Nikitra Bailey pointed to several studies that have shown that the Black community was already lagging significantly behind economically and financially even before the COVID-19 crisis began.

She said the same mistakes and pitfalls that devastated communities of color during the “Great Recession” of 2008 are happening all over again as the coronavirus decimates Blacks financially yet again.

“We all called for reform [in 2008],” Bailey said. “We were ignored because people saw [the CRL’s concerns] as being in only a tiny sector of the economy. Unfortunately, that did not get corrected and [the Black] community disproportionately lost wealth.”

She said that the reforms to the financial system that were enacted during the recession have now either been dismantled or poorly enforced, a trend that has crippled the Black community. “That hardship is falling on the very same, hardest-hit communities,” Bailey said. “We are in a more economically precarious position because none of the protections have endured from that time.”

She added that any recovery efforts that have been undertaken during the last dozen years have “never addressed the past inequities, and what we’re calling for in this COVID response is an addressing of these past inequities.”

Kim D. Saunders, president and CEO of the National Bankers Association, told her co-participants that the recently enacted Paycheck Protection Program run by the Small Business Administration has the potential to keep providing small businesses with payroll support and other financial assistance. She added that if 75 percent of a loan received by a business through PPP is used for payroll support purposes, the loan can be forgiven.

Saunders said the CARES Act and other actions are working to reduce the SBA’s red tape and simplify and streamline the PPP application process, moves that can expand the number of applicants that are eligible. She said that nearly a third of the $300 billion allocated for the PPP is still available for small businesses and encouraged people of color to apply for PPP funds because the NBA-member banks are still diligently processing and facilitating loan applications.

Lisa Rice, president and CEO of the National Fair Housing Alliance, told the panelists that her organization continues to attack the sort of racially biased housing practices that have been painfully exposed by the COVID-19 crisis.

“The other thing that this pandemic has revealed is the deleterious impact that residential segregation has on our ability to live healthy lives,” Rice said. “Residential segregation really lies at the root of many of the structural inequalities and systemic disparities that we’ve heard about.”

Rice added that racist, prejudicial housing practices such as redlining and high-interest loans have continually relegated struggling minorities to disadvantaged communities that often lack services such as hospitals, health-care facilities, banks and financial institutions, full-service grocery stores, quality schools, and Internet and water services.

These communities also frequently contain toxic waste and other pollution that leads to the type of pre-existing health conditions that have always plagued minority communities – and that are now disproportionately killing Blacks with coronavirus.

“That is not accidental,” Rice said of these housing effects. “The result [is] the intentional, discriminatory policies and practices that have created a fundamentally unequal society. “What the pandemic is clearly telling us,” she added, “is that housing discrimination is literally killing us.”

Rice said that as the battle against the COVID economic fallout continues, the NFHA will speak out against the Trump administration’s dismantling of the civil rights measures that are supposed to prevent housing discrimination.

“We’ve worked to ensure that this response to the COVID-19 crisis is fashioned to help dismantle the structural inequalities that are driving the horrific racial disparities that we are seeing,” she said.

Ashley Harrington, federal advocacy director and CRL senior counsel, told the forum that the nation’s student loan debt recently topped a total of $1.6 trillion, adding yet another detrimental complication to the coronavirus pandemic. An already high rate of default and payment delinquency on loan accounts held by Black college-goers will only compound and increase once the COVID crisis passes, she said.

Harrington noted that while the CARES Act took steps to provide temporary relief from loan payments, interest and default fees, it will have minimal or no impact on the $1.6 trillion in loan principal. As with the other areas discussed by the panel – such as housing and lending practices – the student loan crisis must be addressed for the long haul.

The panelists also stressed the need to reform and eliminate payday loans and other predatory lending practices that target vulnerable communities, especially poor and minority consumers, and exploit people’s financial insecurity with triple-digit interest rates and other shady dealings.

The forum participants also stressed that citizens need to remain forceful in advocating for their needs and the needs of their communities by contacting their Senators and pressing them to adopt the HEROES measure and take other steps to ensure the economic security of all Americans.

After that, Waters said, the focus must be on the November election.

“Even as we fight, we’re not going to change the minds of the haters,” she said. “They don’t like [consumer advocacy like the CFPB] because it cannot protect their big friends and those responsible for the fraud and rip offs that are going on, and so our focus has to be on this election coming up in November.

“We’ve got to understand who our friends are,” she added, “and who are the enemies of the people who deserve to have a decent quality of life, and we’ve got to let that guide us in this election.”

This article originally published in the May 25, 2020 print edition of The Louisiana Weekly newspaper.