Research & Policy

In September, the Supreme Court heard oral arguments for a lawsuit that could abruptly and permanently close the Consumer Financial Protection Bureau – which would not only harm consumers and businesses but would also cause economic chaos.

The income-driven repayment plan prevents unpaid interest from increasing a borrower’s loan balance, and ensures remaining balances are forgiven after a certain number of years.

Consumers are increasingly accessing small short-term loans through digital cash advance and Earned Wage Advance (EWA) online applications. Consumers can receive advance amounts up to $750 per pay period while using these apps. Some companies contract with employers to provide this product while others work directly with consumers. In the direct-to-consumer model, the advances are often marketed as “free,” but providers require a variety of fees to expedite the advance and employ pressure tactics allowing them to collect fees in the form of “tips”. These fees make advances very costly for...

The NAACP Legal Defense and Educational Fund, Inc. (LDF) and the Center for Responsible Lending (CRL) submitted a comment in response to the federal financial regulators’ proposed rulemaking on Quality Control Standards for Automated Valuation Study after study has found ongoing, significant undervaluation of homes in communities of color and owned by people of color. Due to decades of past and ongoing discrimination, homes in Black communities and homes owned by Black people are consistently undervalued, contributing to the racial wealth gap. Although some have argued that AVMs can eliminate...

CRL submitted a comment on the Federal Housing Finance Agency’s Single Family Pricing Framework arguing that the FHFA should take three steps: Revisit and revise the Enterprise Regulatory Capital Framework, which currently imposes excessive capital requirements on the GSEs; Continue the forward momentum of its recent elimination of LLPA’s for first-time homebuyers and certain affordable housing products by expanding its efforts to reach minority borrowers with increased marketing outreach, special purpose credit programs, etc., and Eliminate upfront guarantee fees for first-generation...

The undersigned organizations wrote in strong support of the Bureau’s proposed rule applying Regulation Z to Residential Property Assessed Clean Energy (PACE) loans. In the proposed rule, the Bureau correctly recognizes that PACE financing fundamentally acts as mortgage credit, yet is provided by underregulated or unsupervised entities that often exploit the lien priority granted to tax assessments. As a result, residential PACE financing should be subject to the same regulations that apply to first-lien mortgages. The rule, if enacted, will significantly limit the well-documented abuses that...

With nearly 45 million Americans owing 1.7 trillion dollars in student loan debt, the Department’s intent to establish a negotiated rulemaking committee to examine proposals under the waiver, modification, and compromise authority is critical to increasing fairness and affordability for those who must accrue debt to pursue higher education. The sheer scale of the student loan debt crisis in America—and its disproportionate and, often, inequitable, impact on borrowers of color—compels us to urge the Department to use this negotiated rulemaking to develop and put in place a series of strong...

The Consumer Financial Protection Bureau (CFPB) issued a Policy Statement on Abusive Acts and Practices and invited comments from the public. The Center for Responsible Lending applauds the CFPB for its efforts to further clarify abusive acts and practices. The Center further offers insights into how the statement may be strengthened to clarify the ways these acts take unreasonable advantage of a consumer’s inability to protect their interests in selecting or using a product.

This factsheet outlines how H.R. 3564, which would reverse recent FHFA updates to mortgage pricing, would leave borrowers and taxpayers less financially secure.

Millions of Americans continue to experience financial precarity, and this report illustrates how payday and car-title lending extract financial resources from communities across the United States.

Payday lenders charge exorbitant fees to borrowers without assessing their ability to repay, and the annual interest rates on these loans are in the triple digits.

From the letter: We strongly believe many of the reforms being considered today will harm consumers and the financial markets. These misguided approaches will place every American taxpayer at risk by increasing the likelihood that our nation’s economy may suffer yet another financial crisis. There are two proposals that are especially concerning. The first increases the asset thresholds at which financial institutions become subject to regulatory oversight. There are more than 4,000 banks in the United States, and this legislative draft would exempt all but 50 from having to comply with...

From the letter: We strongly believe many of the reforms being considered today will harm consumers and the financial markets. These misguided approaches will place every American taxpayer at risk by increasing the likelihood that our nation’s economy may suffer yet another financial crisis. There are two proposals that are especially concerning. The first increases the asset thresholds at which financial institutions become subject to regulatory oversight. There are more than 4,000 banks in the United States, and this legislative draft would exempt all but 50 from having to comply with...

Today, more than 44 million Americans are crushed under the weight of $1.7 trillion in student loan debt. This debt prevents borrowers – in red states and blue states, urban and rural communities – from fully participating in the American economy. It delays or denies borrowers the opportunity to buy a home, start a business, or invest in retirement, thereby widening the wealth gap for borrowers from families with modest means.

This CRL letter to Congress expresses support for the Federal Housing Finance Agency (FHFA) updates to its mortgage pricing framework, including FHFA’s assessment on lenders of fees known as Loan Level Pricing Adjustments (LLPAs). The letter also urges Congress to reject H.R. 3564, the so-called Middle-Class Borrower Protection Act, a bill that would rescind FHFA’s recent updates.

The Center for Responsible Lending (CRL) and the National Consumer Law Center (NCLC) expressed support for the Department of Financial Protection and Innovation’s (DFPI) proposal to clarify that fintech cash advances are covered by the California Financing Law (CFL), including its fee and interest rate limits. The proposal requires that lenders be licensed under the CFL, with a temporary licensing exception for employer-based advances by firms that register under the California Consumer Financial Protection Law.

The undersigned organizations commend the Department of Financial Protection and Innovation (DFPI) for moving to regulate abusive fintech lenders, including earned wage advance providers. We are very pleased to support the proposed rules and encourage the DFPI to vigorously enforce them to ensure that California’s most vulnerable consumers are not harmed. Signatories California Employment Lawyers Association (CELA) CA Labor Federation CA League of United Latin American Citizens (CA LULAC) California Low-Income Consumer Coalition (CLICC) California Reinvestment Coalition (CRC) Center for...

The CFPB plays an integral role in the nation’s financial system. The Bureau’s work ensures that the system functions in a manner that is responsive to the interests of all market participants—consumers, large financial entities, and smaller institutions like Amici. Congress’s chosen method of funding the Bureau underpins the Bureau’s ability to do this important work, free from the outsized influence of any one market segment. Petitioners’ brief convincingly demonstrates that nothing in the text or history of the Constitution—or any decisions of this Court—supports the Fifth Circuit’s...

The 261 organizations representing millions of students, workers, people of color, veterans, people with disabilities, consumers, and people of faith write in strong opposition to bicameral efforts to use the Congressional Review Act (CRA) to overturn President Biden's actions to pause student loan payments and provide student debt relief for low-income and working-class Americans continuing to recover from the deadly COVID-19 pandemic and its devastating economic fallout.

The U.S. Supreme Court recently heard arguments in two cases challenging the Education Department’s debt relief program. The first lawsuit, Biden v. Nebraska, was filed by several Republican-controlled states claiming that debt relief will hurt the profits of a private student loan servicer chartered by one of the states and may negatively affect future state tax revenues. The other suit, Department of Education v. Brown, was filed by the conservative organization Job Creators Network Foundation Legal Action Fund on behalf of two individual student loan borrowers claiming to be opposed to the...

From the introduction to the letter: On behalf of the undersigned national, state, and local organizations, we urge you to oppose the dangerous package of bills titled the “CFPB Transparency and Accountability Reform Act” that threaten the Consumer Financial Protection Bureau’s (CFPB) funding, organizational structure, and its ability to monitor the marketplace by impeding their rulemaking functions. This package would irreparably harm the CFPB’s effectiveness and ultimately consumers.

CRL and more than 50 organizations committed to gender justice submitted a comment in support of strengthening the Department of Housing and Urban Development (HUD) Proposed Rule on Affirmatively Furthering Fair Housing, which was published in the Federal Register on February 9, 2023 (HUD Docket No. FR 6250-P-01) (Proposed Rule).

Opportunity Financial, also known as OppFi, is a consumer lending company based in Chicago, Illinois that offers personal installment loans. Their marketing suggests they are providing an essential service to the credit and income constrained; their products, however, carry triple-digit Annual Percentage Rates (APRs). Public filings reveal a business model built around high levels of delinquency and default. According to its website, OppFi’s stated mission is to “empower everyday consumers to rebuild their financial health," but the company is a legacy subprime lender. OppFi uses a rent-a-bank...

Opportunity Financial, also known as OppFi, is a consumer lending company based in Chicago, Illinois that offers personal installment loans. Although OppFi’s stated mission is to “empower everyday consumers to rebuild their financial health,” OppFi is a legacy subprime lender. The company uses a rent-a-bank scheme to evade consumer protections and charge customers triple-digit interest rates on its personal installment loan product. In a rent-a-bank scheme, a lender partners with an out-of-state bank. The lender uses that bank’s charter to make loans at rates up to five times greater than the...

In response to a Federal Trade Commission (FTC) notice that it intends to issue regulation, CRL joined a coalition of consumer groups in calling for FTC action to rein-in junk fees. Among other topics, this comment letter highlights a CRL report on installment loan companies that would tack on credit insurance and “automobile club memberships” – charges that meet multiple characteristics of junk fees, including that they’re often a surprise to the consumer and that their value to the consumer is limited or nonexistent. The letter was also signed by: Accountable.US AKPIRG American Economic...