Robert Menendez

The economic and housing crisis that began devastating families in 2007 and 2008 shows that we need responsibility and accountability on Wall Street. The growth of the financial services industry in New Jersey along the Hudson River is a testament to the benefits that strong financial institutions can bring to our state. However, we must have effective accountability and consumer protections to prevent excessive risks that can wipe out the savings and jobs of middle class families.

As a member of the Senate Banking, Housing and Urban Affairs Committee, Senator Menendez has always worked to ensure our financial system is both strong and fair for consumers.  He has led the fights to end unfair, deceptive and fraudulent practices by credit card and mortgage companies, including credit card reform legislation that President Obama signed into law in 2009.

Wall Street’s risky gambling and bad mortgage practices showed the need for reform, as did the obvious failure of our financial regulators to sound the alarm about a looming foreclosure crisis or to stop the Madoff investment scheme.  Senator Menendez has played an active role in that reform effort, sponsoring and supporting legislation to hold Wall Street and its regulators accountable for their mistakes.

Education is a key tool to help consumers protect themselves from predatory firms.  Senator Menendez has championed legislation to increase financial literacy and will continue fighting to protect New Jersey families and ensure that consumers have the resources and information they need to be vigilant and alert in protecting themselves, whether it be from predatory lenders, identity theft, deceptive credit card practices, faulty products, or unsafe food.

Highlights:

• Consumer Financial Protection Bureau.  Strongly supported the creation and implementation of the Consumer Financial Protection Bureau to crack down on bad practices by banks, mortgage companies, credit card companies, and debt collectors. Before this agency was created, consumer protection was scattered among several bank regulators who were not protecting consumers from deceptive tricks and traps.  The CFPB now has the sole job of protecting American consumers from fraud and abuse and ensuring consumers receive the clear information they need to make informed decisions on loans and other financial products.

• Credit Card Reform.  Authored major credit card reform legislation and led efforts to enact the landmark 2009 reform. Credit card reforms protect consumers from unexpected interest rate increases; end the practice of unreasonable fees and penalties; and protect consumers under the age of 21. The following provisions from Senator Menendez’s bill were included in the new law:
  • Protecting college students and other consumers under the age of 21 by requiring them to proactively opt in to receiving credit card solicitations, rather than automatically receiving them;
  • Requiring credit card companies to verify an applicant’s financial ability to pay for the credit card before approving them;
  • Prohibiting credit card issuers from raising interest rates based on the cardholder’s payment history on another bill or a change in their credit score;
  • Banning retroactive interest rate increases;
    
  • Requiring that any fee, such as a late payment fee, over-the-limit fee, increase in interest rate, or other charges do not exceed an amount that is “reasonably related to the cost” that the issuer incurs as a result of the consumer’s action.

• Financial Literacy.  Authored financial literacy law, enacted as part of the landmark Housing and Economic Recovery Act of 2008. The provision fosters better financial education among prospective homeowners and helps identify the most successful methods for delivering counseling services.
  

• Consumer Product Safety.  Authored Restoring Truth in Regulator Travel Act to prohibit officials at federal regulatory agencies from accepting travel paid for by the industries they are charged with regulating. Enacted a similar provision into law as part of the Consumer Product Safety Commission reform legislation in 2008.

• Fighting Hidden Airline Fees. Led the fight to prevent airlines from hiding fees from the flying public. Twice Senator Menendez inserted language into the FAA Reauthorization bill to ban hidden fees and he simultaneously he urged the Administration to use their existing authority to ban hidden fees.  The Senator was successful and the Administration issued rules banning hidden fees that went into effect earlier this year.  The Senator is now urging the Department of Transportation to go even further to allow true comparison shopping by the flying public.

• Insurance Industry Abuse.  Advocated for patient protections in the health reform law, the Affordable Care Act, which prohibits common insurance industry practices such as kicking people off their plan when they got sick, denying coverage because of a preexisting condition and ending the practice of placing arbitrary limits on both annual and lifetime coverage.  With the creation of state-based health insurance exchanges, families and individuals will be able to compare policies and choose the one best suited for their needs in an open and easy to understand marketplace.  Additionally, the law requires insurance companies to spend at least 80 percent of all premium dollars on actual health care, not administrative costs such as advertising and executive pay.  If an insurance company fails to do so, they are required to provide their enrollees with a refund of the difference.
  

• Foreign Investment in the U.S.  Authored a provision enacted into law in 2007 that requires the Committee on Foreign Investments in the United States to notify U.S. Senators when a foreign investment in their state is under investigation. This issue gained attention in 2006 when a company owned by Dubai purchased commercial operations at major U.S. ports without red flags being raised in the federal government. Senator Menendez was a leading critic of that deal and helped lead the charge to reform the CFIUS review process.
  

• CEO Pay.  Authored a provision that will require publicly-listed companies to disclose the ratio of CEO to median worker pay.  Not only is this information relevant to investors concerned about how companies treat their workers, but it will also shine a light on inequality and companies that fire their workers while giving their CEOs big raises.  Some companies already voluntarily disclose this information.

• Wall Street Reform.  Authored several additional provisions of the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act, which reformed our nation’s financial regulatory system to prevent another collapse.
  

• Foreclosures.  As Housing Subcommittee Chairman, he has held multiple hearings to: 
  • Investigate the foreclosure practices of banks and hold them accountable to homeowners;
  • Expand government programs to assist struggling homeowners, helping to stem the tide of foreclosures and begin to stabilize the housing market;
  • Address the glut of foreclosed homes on the market.
  • Senator Menendez has also introduced legislation to:
  • Help homeowners refinance their homes more easily and lower their mortgage payments;
  • Require federal housing regulators to test “shared appreciation mortgages” in which lenders reduce a homeowner’s mortgage debt in exchange for keeping a portion of future increases in the home’s price;
  • Expand loan modification programs and make them more effective;
  • Offer more resources for mediation sessions between homeowners and banks;
  • Provide additional funds for legal assistance for at-risk homeowners;
  • Create a Homeowner Advocate dedicated solely to assisting homeowners.
    

• Holding Banks and Government Accountable.  Senator Menendez wants to hold banks and government accountable, fully enforcing our banking and housing laws and doing more for homeowners.
  
  • Helped ensure that the rights of homeowners are upheld by banks;
  • Proposed reforms to correct past mistakes and prevent them from happening again;
  • Pushed federal regulators to more quickly and effectively help homeowners at risk of losing their homes; including better examining whether principal reductions would help both homeowners and taxpayers;
  • Helped ensure that the rights of homeowners are upheld;
  • Led the effort to hold New Jersey state government accountable for failing to quickly implement the federally-funded HomeKeeper program to give temporary help to unemployed borrowers on their mortgages.