The American economy is recovering from the worst financial crisis and the deepest recession since the Great Depression. The recovery is under way, but we obviously have a long way to go. New York is recovering faster than many states, but the recovery is uncertain and uneven, and unemployment is still too high in New York.
My top priority in the Senate is to do everything I can to ensure all New Yorkers – from dairy farmers and apple growers in upstate, to financial services workers in Manhattan, to technology workers in the Capitol Region – are lifted by the economy’s rising tide. The defining economic statistic of the last several decades is that median incomes have been essentially flat, even while the economy overall was growing. In fact, the past decade was the first since World War II where median incomes declined – and this was true even in 2007, before the housing market crisis destroyed the most important source of wealth for most middle class Americans: the value of their homes.
That is why I am focused like a laser on making sure Congress does everything we can to create the good-paying jobs of the future and to help middle-class Americans stretch their paychecks.
We face a great challenge in dealing with a federal budget deficit that is far too high – partly as a result of decisions made over the last decade that left us ill-prepared to respond to the financial crisis and partly as a result of the economic destruction wrought by that financial crisis. I believe that it is crucially important that we all work together to solve our deficit dilemma, and spending cuts are an important part of that effort. But I also firmly believe that we must fix our budget in a smart way, without sacrificing our long term economic prosperity.
Investments made today to educate our children, to conduct fundamental research and development, and to rebuild America’s critical infrastructure are necessary to ensure that American workers and businesses can compete in the 21st Century.
Credit for Success
As I travelled throughout New York State over the last several years, the most consistent concern I heard from small businesses all across the state was their difficulty getting access to credit – even businesses who were healthy and looking for capital to expand their business and hire new workers.
My travels took me to Ulster County, which had established an innovative program designed to increase the availability of credit to small businesses by bringing together local banks to create lending pools where banks could share the risks among themselves. Last year, I took that program, called the “Credit For Success Second Look Program”
, statewide. Working with New York Business Development Corporation
, we established regional lending pools in every region of the state. Thirty four different banks participated, committing a total of $9.625 million. As of December 2010, the program had made 11 loans for $1.12 million.
Credit for Success will not bring credit to all businesses who need it, but it is an example of federal, state and local government coming together with the private sector to provide innovative solutions to the problems facing our economy.
Credit Union Member Business Lending
Credit unions are an important source of credit for small businesses, but their ability to lend to small businesses is currently limited by an arbitrary cap on the amount they can lend to business members. I was the original Senate sponsor of a bill to allow credit unions to more than double their small business lending, and I have joined Senator Mark Udall (D-CO)
to co-sponsor a similar bill that would allow credit unions to gradually expand small business lending in a responsible manner, following strict guidelines agreed on by a bipartisan group of Senators from across the country. This bill will increase lending by up to $844 million in New York alone, according to conservative estimates, which in turn will create up to 9,000 jobs. Best of all, the amendment will not cost the taxpayers a dime. This is a common sense way to help small businesses create good-paying jobs without increasing our deficit.
Small Business Jobs Act
It is a fact of life that small businesses, in particular new small businesses, are the engine that drives job growth in America. In fact, nearly all net job creation in the United States from 1980 – 2005 occurred in firms that were less than five years old. Without these start-ups, net job creation would have been negative almost every year for the past three decades. That is why I was a strong supporter of the Small Business Jobs Act, which was passed by Congress and signed into law by the President in the Fall of 2010.
This bill included several reforms and targeted programs to increase access to credit for small businesses and promote entrepreneurship, job creation and small business exports, including:
Consumer Protection [Financial Services]
Fighting for a Strong Consumer Watchdog
- doubling the amount of start-up expenses an entrepreneur could immediately deduct from $5,000 to $10,000;
- providing more than $5 million to the U.S. Trade Representative to expand opportunities for U.S. small businesses in foreign markets;
- making it cheaper and easier for entrepreneurs to get small business loans, by waiving SBA fees and eliminating red tape in the approval process;
- increasing SBA 7(a) loan limits from $2 million to $5 million, 504 loan limits from $1.5 million to $5.5 million, and microloan limits from $35,000 to $50,000;
- providing $1.5 billion in grants to States to support State small business lending programs;
- establishing the Small Business Lending Fund to authorize Treasury to invest in community banks on terms that incentivize the banks to increase small business lending.
For too long, consumer protection was treated like the ugly stepchild by banking regulators, who consistently placed the banks’ interests in earning profits ahead of the consumers’ interests in fair and transparent financial products and services. I was an original co-sponsor of the first bill to create an independent Consumer Product Safety Commission
, and a strong supporter of the creation of the Consumer Financial Protection Bureau
in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
The CFPB is an independent bureau within the Federal Reserve System
, whose mission is to make sure markets for financial products and services are working for consumers. Perhaps the greatest benefit of the CFPB is that we will no longer have to enact new legislation every time there is a new product or practice that puts consumers at risk – the CFPB will have full authority to address unfair and deceptive acts by companies providing financial products and services to consumers.
I pledge to work closely with the CFPB to ensure it uses the full scope of its authority to act as an independent watchdog on behalf of consumers, and to hold the CFPB accountable for fulfilling its mandate.
Protecting Credit Card and Gift Card Consumers from Hidden Fees and Surprise Rate Hikes
For over three decades in public service I have made it my mission to protect consumers from unfair and deceptive practices by banks and card companies. In 1988, the so-called “Schumer Box” became law, providing consumers with clear, easy to read explanations about interest rates, transaction fees and other key terms of their card agreements.
More recently, it was clear that upfront disclosure wasn’t always enough if companies can change the terms arbitrarily and without providing adequate notice. I was an original co-sponsor of a bill that prevents card companies from raising interest rates on outstanding balances, requires at least 45 days notice for changes to important terms, and requires penalty interest rates to be reduced if consumers start making timely payments. That bill, the Credit CARD Act of 2009, was signed into law in 2009 and most of its provisions went into effect in February 2010. Recent studies have shown that the bill was successful in giving consumers better disclosure and reducing the number of interest rate increases, saving consumers money at a time when they need to stretch every paycheck.
Protecting Consumers from Hidden Fees and Terms in Gift Cards
Gift cards have become popular and convenient alternatives to giving cash or other traditional gifts. However, consumers were increasingly faced with hidden or confusing terms that would siphon the value of the cards back from consumers to the card issuers. That’s why I introduced a bill to prohibit inactivity fees and other periodic fees on gift cards, and to require that gift cards do not expire for at least five years after they are issues. I worked to ensure that my bill was included in the Credit CARD Act of 2009, which was signed into law in 2009 (as discussed above).
Protecting School Districts and Municipalities from Online Banking Fraud
With more people than ever doing their banking over the Internet, identity theft has been a huge and growing risk, not just for individual consumers, but for school districts, municipalities and other business customers. Under current law, banks are generally responsible for losses suffered by individual customers as a result of unauthorized transactions. However, school districts and municipalities are not. So last year I introduced a bill that would protect school districts and municipalities to the extent as individual customers. I plan to reintroduce that bill this Congress. I am also committed to working with the banking regulators to ensure that banks have up-to-date fraud protections in place, and are actively upgrading their systems to counter the increasingly sophisticated online fraud schemes.
Making Sure Consumers Don’t Get Ripped Off with Unfair Overdraft Fees
In recent years, many banks deprived consumers of meaningful choices regarding their bank accounts by automatically enrolling them in what the banks called overdraft “protection” programs. In reality, these programs turned into high cost services that often resulted in consumers paying overdraft fees that were several times more than the amount by which they overdrew their accounts.
I cosponsored the “Fairness and Accountability in Receiving Overdraft Coverage Act of 2009,” which required that consumers provide written consent to enter overdraft protection programs, and required that any fees assessed under those programs be reasonable and proportional. By supporting a consumer “opt-in” overdraft protection program, I trust that consumers will be able to make a meaningful choice about their accounts in connection with overdraft coverage fees.
I also called on the Federal Reserve to require that banks give consumers the option to enroll in overdraft programs voluntarily. The Fed responded with a series of new rules requiring that consumers opt into overdraft programs, and ensuring they receive more robust disclosure when making that decision.