Back in 2008, a major financial crisis occurred, sending a shock throughout the global economic system. This event would lead to a resounding need to: a) reevaluate the banking system, b) strengthen currently existing financial regulations, and c) evaluate risks to consumers who engage with financial institutions. We’ll take this opportunity to discuss what happened during the crisis and what you should know about your rights as a result of it.
There are many factors that contributed to the 2008 financial crisis. Many will correctly argue that the crisis had been building up for quite a while. While there are several reasons, we’ll focus on one in particular. One of the most pressing issues that resulted in the financial crisis was the fact that people were sold banking products that they did not fully understand, and more importantly, could not afford. Specifically, the mortgage products sold had resounding impacts not only on consumers but on businesses and financial institutions, as well. The selling of high-risk mortgage products ended up depressing the housing market. When this occurred, homes either ended up being worth less than the actual value of the mortgage, or people just walked away from the mortgage since they couldn’t pay for it.
With the financial institutions’ investment in mortgage-backed securities, the decline in the market made banks unable to lend further. Since multiple bank failures would create further problems, the government decided to bail out several banks in an effort to get these banks to continue lending and avoid an economic meltdown.
Estimates about the financial loss caused by the crisis vary; however, a paper produced by the Federal Reserve Bank of Dallas provides the following picture of the impact of the crisis:
Our bottom-line estimate of the cost of the crisis, assuming output eventually returns to its pre-crisis trend path, is an output loss of $6 trillion to $14 trillion. This amounts to $50,000 to $120,000 for every U.S. household, or the equivalent of 40 to 90 percent of one year’s economic output.
What happened after the crisis?
In the wake of the crisis, some major work needed to be done. Most importantly, the crisis highlighted that a revamp of financial regulations was much needed. These improvements were carried out through the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Per Investopedia, the Dodd-Frank Act, as it is abbreviated, is a massive piece of financial reform legislation passed by the Obama administration in 2010. The Act was passed as a way to reduce the risks posed by financial institutions across the country.
There are many different components of the Act. In fact, the bill was roughly 2,300 pages codified, several were also just enhanced to further mitigate risk. The Act also created the Consumer Financial Protection Bureau (CFPB). Per the mission of the CFPB, the Consumer Bureau is focused on one goal: watching out for American consumers in the market for consumer financial products and services.
What should you know about banking now?
Before you enter into any arrangement with a bank, you should know that you are entitled to certain protections. There are regulations that cover everything from the disclosures you are required to receive to the specific calculations of the loans you’re obtaining. In fact, there are so many financial regulations that the industry will jokingly call it the “alphabet soup” of laws. Banks are required to comply with the regulations and if something seems off about the products or services you’re receiving, you should say something immediately.
A few regulations any informed consumer should know include Regulation B: the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), Regulation E: Electronic Funds Transfer Act, and Regulation DD: Truth in Savings, among others. We’ll go more in-depth with some these acts at a later time, but at a high level, you should know that these acts are designed to protect your rights as a consumer at financial institutions.
For more information about the consumer protection tenants of Dodd-Frank, visit the CFPB’s website. There you will find regulation guidebooks and helpful calculators/tools to utilize before making a credit decision.
Stay tuned next week for an overview of the emerging industry of financial technology (fintech)!
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The following open letter is written by Hindus for Human Rights, an organization advocating for pluralism, civil and human rights in South Asia and North America, rooted in the values of Hindu faith: shanti (peace), nyaya (justice) and satya (truth). They provide a Hindu voice of resistance to caste, Hindutva (Hindu nationalism), racism, and all forms of bigotry and oppression.
Dear President Biden,
As Indian-Americans, human rights organizations, and concerned allies, we are writing to urge you to engage publicly and meaningfully to push back against the Indian government’s escalating attacks on human rights and democracy, especially ahead of Prime Minister Narendra Modi’s state visit to the United States.
Despite objective evidence that India’s democracy is under critical attack, you have not spoken out about this crisis. In early 2023, Indian authorities conducted retaliatory raids on the BBC’s Delhi and Mumbai offices for releasing a documentary about Prime Minister Modi. The week before the Summit for Democracy, the Indian government made three successive attacks on Indian democracy. First, the ruling Bharatiya Janata Party expelled Rahul Gandhi from Parliament. Second, the Indian government shut the internet down in Punjab, severely impacting the rights for Sikhs to peacefully organize and protest. And third, the Indian Supreme Court ruled that Indians can be found guilty by association for terrorism. And yet, not one representative from the Biden Administration said anything about even one of these developments. Instead, while Islamophobic violence gripped India in late March, you invited Prime Minister Modi to speak at the Summit for Democracy. Mr. Modi visits DC at a time when the state of Manipur has experienced heavy communal and anti-Christian violence after Modi’s ruling party pushed an initiative to undermine Indigenous rights in the state.
“As privileged members of the diaspora, it’s our duty to challenge the repressive practices of the current regime in India. We stand in solidarity with those … opposed to the government’s attempt to reshape the country into a Hindu nationalist state. https://t.co/RxU9wUy2Zy
Even when confronted with questions by Indian reporters about human rights in India, your administration has only had private two-way conversations about how both of our governments can always improve. Quite frankly, we find it unacceptable to see such equivocation on Indian democracy from an administration that has been strident in its defense of American democracy and the rule of law.
India is one of the fastest autocratizing nations in the world, mostly thanks to the current government. Freedom House has rated India as a “partly-free” country for the past three years, and has blamed Prime Minister Modi’s government for a rise in discriminatory policies, including persecution against Muslims and caste-based violence against Dalit and Adivasi communities; harassment of civil society, protestors, academia and the media, and the targeting of political opponents. It has also rated Indian-administered Kashmir as “not free,” citing violations of human, civil, and political rights after the Modi government revoked the territory’s autonomous status. In Reporters Without Borders‘ press freedom ranking, India has dropped to 161 out of 180 countries in 2023. India has appeared in the Committee to Protect Journalists’ Impunity Index — which examines accountability for unsolved journalists’ murders — every year for the past 15 years and currently ranks in 11th place worldwide. According to PEN America’s Freedom to Write Index, in 2022, India was one of the top 10 countries that jailed writers globally. The Varieties of Democracy Institute characterizes India as an “electoral autocracy” and blames India’s descent into autocracy on Prime Minister Modi. And the U.S. Holocaust Memorial Museum has said India has been one of the top 15 countries at risk for a mass atrocity event every year since 2017, which reflects the toxicity of Indian politics under Modi.
“If the President meets with PM Modi, then the protection of the Muslim minority in a majority Hindu India is something worth mentioning…if you do not protect the rights of ethnic minorities, there’s a strong possibility India starts pulling apart.” Thank you @BarackObama! https://t.co/RhcMNfiqaR
Given the magnitude of this crisis, we ask you to engage directly with Indian-American and human rights civil society leaders to explore solutions to address India’s human rights crisis. We also ask you to employ the tools at your disposal to ensure that the Indian government cannot attack Indians’ human rights with impunity. As the 2022 Bureau for Democracy, Human Rights, and Labor report details, several government individuals have committed human rights violations that, under U.S. law, would qualify them to be sanctioned under the Global Magnitsky Act. Indian security forces that have engaged in human rights violations should have security assistance rescinded, under the Foreign Assistance Act of 1961.
Finally, we urge you to publicly call on the Indian government to honor its commitments to human rights, including calling on Prime Minister Modi and his cabinet to halt the use of anti-terror laws to arbitrarily detain political critics. You can publicly denounce the rising numbers of political prisoners and the weaponization of the rule of law in India to shut down criticism. Even if you are not willing to personally criticize the Prime Minister, you have ample opportunity to criticize the Indian government’s misuse of public trust and public institutions to consolidate power and undermine the will of the Indian people.
This morning in DC, on the lawn of The White House at the welcome reception for Modi.
As President of the United States of America, you hold a unique position to lead the fight against authoritarianism. Prime Minister Modi will listen to you when you speak. But he and his allies will only change if you take a stand publicly. We urge you to listen to those of us who care about India and ensure that one man cannot steal the futures and the rights of our loved ones in India.
— Signed by countless organizations and individuals leading the charge (linked here).
Every year on August 5th, the Sikh American community remembers one of our community’s most devastating tragedies in recent memory — the Oak Creek massacre. On this day in 2012, a white supremacist gunman entered the Sikh Temple of Wisconsin, a gurdwara (Sikh house of worship) in Oak Creek, Wisconsin where he shot and killed six worshippers and severely injured others. This violent attack was the deadliest mass shooting targeting Sikh Americans in U.S. history, and at the time, was one of the worst attacks on a U.S. house of worship in decades. Six worshippers — Paramjit Kaur Saini, Sita Singh, Ranjit Singh, Prakash Singh, Suveg Singh Khattra, and Satwant Singh Kaleka — were killed on that horrific day. An additional community member, Baba Punjab Singh, was severely paralyzed and ultimately passed away from complications related to his injuries in 2020. Others, including Bhai Santokh Singh and responding police officer and hero, Lt. Brian Murphy, were seriously wounded during the shooting.
In 2022, the community came together to demonstrate that we are undaunted. My organization, the Sikh American Legal Defense and Education Fund (SALDEF) joined in supporting the anniversary observance at Oak Creek: a remembrance eventcentered around the theme of “Heal, Unite, Act.” The Oak Creek Sikh community hosted a series of in-person events, including the 10th Annual Oak Creek Sikh Memorial Anniversary Candlelight Remembrance Vigil on Friday, August 5, 2022. The program included a representative from the White House, Wisconsin Governor Tony Evers, Oak Creek Mayor Dan Bukiewicz, and representatives of the families who lost loved ones. Being there in Oak Creek 10 years after the tragedy was deeply meaningful — both to see the inspiring resilience of this community and to remember how much remains to be done.
In D.C., SALDEF continues to fight for policies that improve the lives of Sikh Americans. I had the honor of chairing the most recent iteration of the Faith-Based Security Advisory Council at the Department of Homeland Security, providing recommendations at the request of Secretary Alejandro N. Mayorkas. Consequently, the three subcommittees published a report that emphasized the importance of greater accessibility, greater equity, and greater transparency in counterterrorism efforts that for too long revolved around surveilling populations like the one that was senselessly attacked at the Oak Creek gurdwara in 2012. Leading the FBSAC as a Sikh woman, and representing a community that was highly targeted alongside Muslims by both white supremacists and in post-9/11 counterterrorism profiling, was an opportunity to push the Council to advocate more fiercely for further information-sharing between communities and law enforcement, extending grant opportunities for security for Gurdwaras and other houses of worship, and building trust between the government and Sikh communities. In addition, I advocated for accountability for the damage needlessly caused to Muslim, Arab, South Asian, and Hindu (MASSAH) communities by federal agencies historically pursuing “counterterrorism” objectives which has resulted in eroded trust rather than the development of strong partnerships.
Although we have made great strides in this country, there is still more to do. Through our work we have partnered with many across the nation to come together and find solutions through tenets central to Sikhism and America — unity, love, and equality.SALDEF continues to strongly endorse the policy framework articulated across the Domestic Terrorism Prevention Act (H.R. 350 / S. 963); Justice for Victims of Hate Crimes Act; and the Nonprofit Security Grant Program (NSGP) Improvement Act (H.R. 6825). We believe strongly in mandating federal agencies to create dedicated offices to investigate domestic terrorism; allowing prosecutors to feasibly indict perpetrators of hate crimes; and allowing religious nonprofits to access federal funding to enhance their own security.
While 11 years have passed, the effects of the Oak Creek shooting are never far from the minds of Sikh American advocates and the community we serve. SALDEF will not stop taking a stand against senseless violence and hate crimes. We continue to work in unity with our community and movement partners, and fight for better policies that will actively keep all of our communities safe. Through tragedy, we find hope. We know there can be a world where people from all backgrounds and cultures can practice their faith freely and, even though it has eluded the Sikh American community in the past, we still believe this world is possible.
Photo Courtesy of Amrita Kular