CRL in the News
The Treasury report recognizes that "affordability is the really the key issue facing housing finance right now," said Mike Calhoun, president of the Center for Responsible Lending. The costs associated with risk-based pricing along with the re-pricing of mortgage insurance have suppressed credit access.
Deborah Goldstein, the executive vice president of the North Carolina-based Center for Responsible Lending, said confession of judgement clauses have been outlawed in many states because “it really undermines the typical judicial process. “It’s a basic principle of due process,” she said. “If you owe somebody money, you should have an opportunity to dispute what they’re doing.”
Graciela Aponte-Diaz, director of California Policy for the Center for Responsible Lending, said the attorney general’s investigation is needed. “Californians deserve to know in full detail the extent of damage these activities have caused and what their long term affects will be. We hope the attorney general’s investigation yields results for unanswered questions that Californians have,” she said in a statement.
To Aracely Panameno, director of Latino affairs for the Center for Responsible Lending, the Wells Fargo affair will hamper broader efforts to get immigrants into the financial mainstream. “We have spent a great deal of time trying to persuade folks that it's better to be banked than unbanked,” she says. “This completely undermines all of that effort and reinforces the idea that people in the banking industry are out for themselves.”
The biggest negative with car title loans are the sky-high interest these lenders charge. According to the Federal Trade Commission, title loans typically carry an annual percentage rate of 300%. A report by the Center for Responsible Lending in 2013 summed it up this way: If you borrowed $1,000 for a month from a title lender, you'd typically pay $250 in interest. That is exorbitant.
“People are increasingly missing payments within the first six months of taking out their auto loans, which is a telltale sign that loans are being made that are clearly unaffordable,” Chris Kukla, senior vice president of the nonpartisan Center for Responsible Lending, told Salon.
The banks’ practice involves processing the largest charges received first, rather than in chronological order. That “empties bank accounts faster,” said Michael Calhoun, president of the Center for Responsible Lending, a watchdog group that’s called on federal regulators to end the practice known as high-to-low posting.
Graciela Aponte-Diaz, a policy director for the Center for Responsible Lending, says low-income families, who may not have a bank account, often use prepaid cards. But the cards can come with hidden fees, something that will change with the new “know as you go” provision.
Consumer groups are praising the new rules on prepaid credit cards just released by the federal Consumer Financial Protection Bureau. The regulation goes into effect next fall and will make prepaid card issuers follow many of the same rules that apply to credit cards. Graciela Aponte-Diaz, a policy director for the Center for Responsible Lending, says low-income families, who may not have a bank account, often use prepaid cards.
Car-title loans provide a percentage of a vehicle’s total value in exchange for the promise of quick cash. Unfortunately, when car titles are used as collateral for one of the most predatory and high-cost consumer loans, another cycle of debt can begin. The typical car-title loan is refinanced eight times and comes with triple-digit interest rates as high as 300 percent. Each year, car-title loans strip $4 billion in fees from consumers. The looming threat of repossession, which affects one in five consumers, often prompts these costly renewals.