CRL in the News

Under the U.S. Department of Education’s income-driven repayment plans, student loan borrowers are entitled to get any of their remaining debt forgiven after 20 years or 25 years. Yet many have not seen that promised relief. “This is due, in part, to strong financial disincentives for student loan servicers to inform consumers about the program and their ability to qualify for it,” said Nadine Chabrier, a senior policy and litigation counsel at the Center for Responsible Lending.

"Financial institutions had encouragement from the federal government not to lend to majority minority communities. Banks were empowered to decline loans from people of color," said Mitria Spotser.

The second panel on solutions to assist first-time home buyers was moderated by NAR Vice President of Policy Advocacy Bryan Greene, with Katrina Jones, Fannie Mae's vice president of equity and impact; Michael Calhoun, Center for Responsible Lending; George Fatheree, "Bruce's Beach" attorney and ORO Impact founder; and David Berenbaum, deputy assistant secretary for housing counseling at the Department of Housing and Urban Development.

Your debt-to-income ratio, which is usually calculated by dividing all your monthly debts by your monthly income, is a key factor in mortgage underwriting, said Christelle Bamona, a senior researcher at the Center for Responsible Lending. “Those eligible for SAVE will experience reduced payments, which will in turn lower their debt-to-income ratio,” Bamona said. Most borrowers should qualify for the SAVE plan as long as their loan is in good standing.

Their bill is endorsed by organizations that include the Mortgage Bankers Association, the Center for Responsible Lending and the National Consumer Law Center.

Mitria Spotser, federal policy director at the nonprofit Center for Responsible Lending, said small minority-owned banks, credit unions and nonprofit organizations are increasingly important mortgage providers in minority and low-income neighborhoods. Policymakers and bank regulators should encourage their work, both with increased federal CDFI funding and with continued pressure on larger banks to buy mortgages from them, she said. “We need to continue to encourage this support by larger financial institutions of smaller nonprofits who are doing that work,’’ she said.

Overdraft programs today are hugely profitable. If banks were to bring their overdraft fees down to the level required to cover costs, they would forgo these profits. But to challenge the CFPB proposal on that ground is to argue that the financially vulnerable should be expected to subsidize the costs of providing checking accounts to the rest of us. To paraphrase Ms. McArdle: Who could defend that?


Total fees translate to an annual percentage rate of more than 330% for the average earned wage access user — a rate comparable to payday lenders, according to the California report. It analyzed data from seven anonymous companies across business models and fee structures. “It’s another version of payday loans,” Monica Burks, policy counsel at the Center for Responsible Lending, a consumer advocacy group, said of earned wage access. “There’s really no meaningful difference.”

Policymakers and regulators should follow Colorado's lead by protecting consumers from predatory rent-a-bank loans and defending the laws already put in place. Banks and investors would be wise to avoid reputational risks that accompany participation in these schemes.

"There is limited research on how this plan could impact other dimensions of financial security for borrowers. For example, how could this plan affect borrowers' ability to obtain wealth-building assets, like mortgages or business loans?" said report co-author Christelle Bamona, senior research at CRL. "Research has shown previously that student loan debt has prevented several families from acquiring assets like homes. And owning a home has traditionally been considered as something crucial for attaining financial security and also building generational wealth."