Research & Policy

CRL joins mortgage bankers, Realtors, home builders and other housing groups in explaining how high down payments would make homeownership more expensive or out of reach for millions of American.

Replacing CFPB Director with Commission and changing the funding structure would weaken the bureau's accountability and independence. S. 737 would threaten the independence of the newly-enacted Consumer Financial Protection Bureau (CFPB) and would harm the ability of the Bureau to properly protect consumers from predatory and abusive financial practices. The bill, which would remove the independent funding mechanism and fundamentally change the structure of the CFPB from a single, accountable director to a weak five-person commission, would derail the consumer protections enacted under the...

H.R. 1121 would threaten the ability of the newly-enacted Consumer Financial Protection Bureau (CFPB) to protect consumers from predatory and abusive financial practices. The bill, which would fundamentally change the structure of the CFPB from a single, accountable director to a weak five-person commission, would derail the consumer protections enacted under the Dodd-Frank act (P.L. 111-203). We urge Congress to reject this bill and keep the single director in place for the following reasons: CFPB should be implemented and given a chance to succeed before changes to its structure are enacted...

CRL joins civil rights groups in asking Congress to take a comprehensive approach to GSE reform that addresses lending disparities and underserved borrowers.

Ben Bernanke, Chairman Board of Governors of the Federal Reserve System John Walsh, Acting Comptroller Office of the Comptroller of the Currency Sheila Bair, Chairman Federal Deposit Insurance Corporation John Bowman, Acting Director Office of Thrift Supervision Re: Withdrawal of Proposed Consent Orders Regarding Mortgage Servicing Illegalities Dear Federal Regulators of the Financial Institutions of the United States: The undersigned national labor, civil rights, consumer and community organizations call on you to withdraw the proposed consent orders issued to the nation's mortgage servicers...

Dealer Markups Alone Cost Americans $25.8 Billion Over the Lives of their Loans Predatory practices in auto financing force consumers to struggle not only for a competitive and affordable loan, but for a fair and honest one. Finding a good deal is no longer based on the quality of the car or the creditworthiness of the customer, but rather the customer's ability to survive a financial shell game with one of the largest investments most Americans will ever make. The following are some of the most harmful abuses created by such financial shell game ( click on each one to find out more) : DEALER...

CRL and the National Consumer Law Center filed an amicus brief supporting the Federal Reserve's opposition to a TRO and preliminary injunction that would prevent new mortgage rules from going into effect.

Read the full report (PDF) >> Read the executive summary (PDF) >> Payday Loans, Inc.: Short on Credit, Long on Debt dispels the notion that a payday loan is a short-term debt. Although marketed and advertised as a quick solution to an occasional financial shortfall, the actual experience of payday loan borrowers reveals there is nothing quick about the loan except its small principal. According to new CRL research that tracked about 11,000 payday borrowers over two years, many borrowers remained indebted for the 24 months that followed their initial loan. As payday's crippling cycle of debt...

Download this ruling (PDF) >> An 11th Circuit Court held that an arbitration clause was unenforceable in a suit charging BB&T with reordering debit card transactions to boost bank overdraft fees.

Banks' Foreclosure Bias Hurts Investors CRL's report—"Fix or Evict? Loan Modifications Return More Value Than Foreclosures"—shows that banks routinely choose foreclosure over modifying mortgages, even when fixing the loan would be better for loan investors. This bias to foreclose drains investments, including pension funds for retirement, and slows economic recovery. Download PDF of complete report here. What do investors think? See our press release, including a quote from Bill Frey, President of Greenwich Financial Services. When a mortgage becomes delinquent, loan servicers are charged with...

CRL, the National Association of Realtors, the National Association of Homebuilders, and the Consumer Federation of America sent a joint letter to federal regulators, urging them to avoid arbitrary high down payment requirements on mortgage loans. We argue that this would make buying a home more costly, lock out many first-time homebuyers, and short-circuit a recovery of the housing market. Instead, regulators should adopt standards for core underwriting factors to lower the risk of default. These include strong loan documentation, assessing a borrower's ability to repay, reasonable debt...

Most consumer finance companies turned a profit in 2008. While the rest of the financial world was reeling from the recession and the effects of poor lending practices, 80% of NC consumer finance companies turned a profit. Clearly, the law provides ample opportunity for consumer finance companies to profit. Consumer finance companies are demanding guaranteed profits. The CEO of a consumer finance company said in an open meeting, "I deserve a 15% return on equity." The law should only guarantee the ability to make a profit, not confer a right to profit for anyone who applies for a license...

Recent proposals call for requiring prospective homeowners to make a 10-20 percent down payment when purchasing a home. This is seen--mistakenly--as "getting back to the way mortgages used to be made." In fact, low down payment home loans [i] have been a significant and safe part of the mortgage finance system for decades, bearing little resemblance to subprime and other alternative mortgage products that crashed our economy. And responsible low down payment loans are also a key to the recovery of our nation's housing market and economy. CRL's paper discusses the following key points: Between...

Download Full Report (PDF) NCCOB REPORT SHOWS THAT CHANGES TO THE CONSUMER FINANCE ACT ARE UNNECESSARY AND UNWARRANTED "In light of the foregoing findings and after careful consideration of the following report and submissions from meeting participants, the Commissioner does not recommend any changes in the CFA [Consumer Finance Act], either to enhance industry revenue or increase consumer protections." The report is the culmination of four NCCOB-sponsored meetings – three and one half of which were dedicated to industry presentations -- and months of data analysis and other research. This is...

The NCLC/CFA 2011 Refund Anticipation Loan Report Chi Chi Wu, National Consumer Law Center Contributing author: Jean Ann Fox, Consumer Federation of America? Executive Summary Refund anticipation loans (RALs) are one to two week loans made by banks, facilitated by tax preparers, and secured by the taxpayer's expected tax refund. RALs can carry triple digit APRs, and expose taxpayers to the risks of unpaid debt if their refunds do not arrive as expected. This is the tenth annual report on the RAL industry from the National Consumer Law Center and Consumer Federation of America. After ten years...

Press Release Full Pollster's Report A brief poll conducted in November 2010 to guage public opinion of a potential moratorium and other land-use restrictions on paydy lenders in San Jose found that most voters hold an unfavorable view of payday lending; many would like to see stronger restrictions on payday lenders and most believe that the City of San Jose should regulate payday lenders where possible. According to the Poll Payday loan stores start with a bad reputation. Fifty-two (52%) percent of voters hold an unfavorable view of them. This is higher than the unfavorable ratings of both...

CRL testifies that the biggest barrier to housing recovery is continuing foreclosures that could be stopped. Mortgage servicers are foreclosing unnecessarily, and the government has not yet used all the tools at its disposal to bring foreclosures under control and restore stability in the housing market.

Congress should promote a strong, engaged Consumer Financial Protection Bureau Consumer spending comprises 70% of the U.S. economy, so restoring consumer confidence and demand for products is vital to creating jobs. This is more likely to happen if consumers know that the financial marketplace is fair and safe for everyone.In addition, small businesses—which create 80% of our nation's new jobs—rely heavily on non-bank credit and need access to low-cost, fair credit to grow. This document provides a quick overview of CFPB's objective and scope of activity. "Business leaders who care about the...

Download our complete hill brief Wall Street Led the Toxic Market 5 Facts You Should Know About Fannie Mae and Freddie Mac Additional Resources on the GSEs' Role in the Financial Crisis " Fannie, Freddie and the Foreclosure Crisis" – Center for Community Capital " Faulty Conclusions Based on Shoddy Foundations" – Center for American Progress Fact: The GSEs were prohibited from buying subprime mortgages. Fannie and Freddie could not guarantee or securitize subprime mortgages because subprime loans were outside the prescribed GSE guidelines. All subprime mortgage-backed securities were created...

In this letter to federal regulators, CRL and other national civil rights, labor and consumer organizations share their views on the regulation of securitizers of residential mortgage loans - specifically "qualified residential mortgages" or QRMs. The two points made by the letter: 1. Securitized loans should meet basic servicing standards to prevent unnecessary foreclosures 2. QRM standards should not include downpayment requirements that penalize responsible, creditworthy borrowers who lack the wealth necessary for a large down payment. Signers to this comment letter were the following: AFL...

And guess what! That's a GOOD thing. Bank of America and Citibank cover debit card and ATM overdrafts only if their customers have signed up for more reasonably priced coverage, by linking their savings or line of credit to their checking account. Q: Why is this A GOOD THING? No more surprise high-cost overdrafts at the ATM or checkout for customers of these banks. These two banks are so big, it means one third of debit card transactions made each year are not subject to these high-cost fees. Since Bank of America and Citibank are doing it, more banks and credit unions may follow in order to...

CRL and other advocates join mortgage industry leaders in urging regulators to carefully consider how they define mortgages that will be exempt from certain rules. An overly narrow definition could unnecessarily tighten access to home loans.

The National Consumer Law Center ("NCLC") respectfully submits the following comments on behalf of its low income clients, as well as Americans for Financial Reform, California Reinvestment Coalition, the Center for Responsible Lending, Consumer Action, Consumers Union, National Association of Consumer Advocates, National Community Reinvestment Coalition, National Fair Housing Alliance and the Neighborhood Economic Development Advocacy Project, regarding the Federal Reserve Board's proposals to revise numerous regulations under the Truth in Lending Act ("TILA") governing home-secured lending...

CRL and allies recommend that regulators include servicing standards when implementing financial reform. This letter also includes specific recommendations for defining a "qualified residential mortgage" that encourages sustainable home loans.

Detailed summary of provisions in Title XIV: "Mortgage Reform and Anti-Predatory Lending Act" Subtitles A-C: Mortgage Originations Contents: Timeline Key Definitions & Concepts "Qualified mortgage" "Residential mortgage loan" "Mortgage originator" Origination standards – originators (Subtitle A) Duty of care Originator compensation (including yield spread premiums) Steering Origination standards – loans (Subtitle B) Ability to Repay Prepayment penalties Other minimum standards Additional Disclosures TIL Remedies – general amendments HOEPA – High cost loans (Subtitle C) Definition of "high cost...