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Press Releases

July 13, 2009
A new policy brief by the Center for Responsible Lending chronicles the repeated failure of federal bank regulators over the years to rein in irresponsible lending practices. Example after example of regulatory delay or inaction demonstrates the need for a stand-alone, independent regulator focused solely on ensuring basic, common-sense safeguards for consumers. For the full report, please go here. Here are some examples of the regulatory lapses documented by CRL in its policy brief, titled "Neglect and Inaction: An Analysis of Federal Banking Regulators' Failure to Enforce Consumer...
July 10, 2009
During the surge of media attention on today's historic meeting between Pope Benedict XVI and President Barack Obama, it is important to note that only days before His Holiness used his own moral authority to express concerns for the current financial crisis. In his encyclical Caritas in Veritate (Charity in Truth), the Pope speaks to the developments that led to the current global economic crisis, naming badly-managed and short-sighted financial practices among its causes. He urges financiers to "rediscover the genuinely ethical foundation of their activity". Pope Benedict's words are...
June 29, 2009
Statement from Michael Calhoun, President, Center for Responsible Lending "Today the Supreme Court announced a decision that will play a major role in how and whether consumer protection laws are enforced. In Andrew Cuomo vs. the Clearing House Association and the Office of the Comptroller of the Currency (OCC), the court overturned lower court decisions, determining that states can enforce their own civil rights laws, including pursuing claims against national banks, when necessary, to ensure that banks follow the law. This Supreme Court decision is a victory for taxpayers, who have...
June 24, 2009
Ellen Harnick, Senior Policy Counsel for the Center for Responsible Lending contributed this guest post to "The Hearing", a blog of the Washington Post. Over the past decade, federal bank regulators looked the other way as responsible loans were crowded out of the market by aggressively marketed financial products carrying hidden costs and fees. Tricky products, whose most "innovative" feature was their ability to obscure their true cost, led a race to the bottom that stifled innovation of any benefit to consumers. The aggressive marketing of these products caused an enormous loss of...
June 17, 2009
National consumer protection organizations applauded President Obama's proposal to create a new federal Consumer Financial Protection Agency to ensure the safety, fairness and sustainability of credit. The agency would have broad powers to ensure that credit and payment products do not have predatory or deceptive features that can harm consumers or lock them into unaffordable loans. "The international economic crisis was triggered by the failure of federal regulators to stop abusive lending, particularly in the housing sector," said Travis Plunkett, Legislative Director of the Consumer...
June 17, 2009
"We commend the Administration for its innovative plan for protecting America's families from abusive lending practices, including those that led to the current mortgage crisis, as well as those involving costly overdraft bank fees and other small loans. As our country grapples with the current financial meltdown and its epidemic of foreclosures that have crippled the economy, we must address the regulatory lapses that brought us here. At the same time, we must protect consumers through targeted laws such as the credit card legislation Congress recently passed and the pending legislation...
March 23, 2009
Download Survey Findings U.S consumers overwhelmingly want to be asked their preference before a bank or credit union enrolls them in a program to cover debit card purchases when they do not have the funds, a new Center for Responsible Lending survey finds. Financial institutions typically enroll their customers in a system that covers debit card overdrafts and then assesses them an average $34 fee for each transaction, often on the purchase of an item that costs less than the fee itself. The new survey finds that most people would rather be asked if they want to be in such a program...
March 10, 2009
Statement of Mike Calhoun, President, Center for Responsible Lending   The Center for Responsible Lending commends Bank of America for its decision to stop charging overdraft fees on debit card purchases. With this change, Bank of America—which issues more debit cards than any other bank— joins another banking giant, Citibank, in practicing responsible debit card overdraft policies.   Most other large banks typically charge a $35 fee on an average debit card overdraft of only $17—an exorbitant cost for credit that the bank automatically repays itself only days later from...
February 10, 2009
No one likes overdraft fees: Who wants to pay $34 for a $5 hamburger? The public has until a March 30 deadline to tell banking regulators at the Federal Reserve Board whether a) banks should be required to let customers "opt in" to these high-cost lending programs or b) be allowed to continue automatically signing them up? Only the first of the Federal Reserve's proposed rules—the opt-in option---would be a real step toward reforming overdraft practices. That's because it would require banks to get a customer's permission before enrolling him or her in a costly overdraft program for...
December 22, 2008
Federal banking regulators yesterday withdrew proposed rules that would have largely failed to protect consumers from astronomically high-cost, unsolicited overdraft loans. The Fed then immediately issued a new proposal containing two alternative approaches. The impact the new proposal will have on abusive fees depends primarily on which approach the Fed ultimately chooses. Consumers pay $17.5 billion per year in overdraft fees that banks charge after routinely allowing consumers to overdraw their accounts by checks, ACH transactions, ATM withdrawals and debit card purchases. This exceeds...

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