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The State of Lending in America and Its Impact on U.S. Households

June 16, 2015
Consumer Finance
Research

State of Lending provides an across-the-board survey of financial products that Americans use to handle everyday transactions, buy homes and automobiles, and build savings and wealth.

The report outlines predatory lending practices in various fields of consumer lending, and explains why protecting fair, affordable access to credit is vital for both consumers and the U.S. economy. The report also describes the regulatory and legislative actions needed to halt the predatory lending practices that exist today and prevent the rise of new abuses. It is intended to inform the critical debate on how to rebuild our economy and invest in the future of American families.

1. Foreward and Introduction
Read the foreword by Sheila Bair and our introduction to the State of Lending report.

2. America's Household Balance Sheet
Why Americans are vulnerable to predatory lending today.

Part 1: Abuses in Traditional Learning

3. Mortgages
Benefits of homeownership for families and communities; causes of the foreclosure crisis; how new mortgage reforms can restore the housing market.

4. Auto Loans
How lack of transparency and regulation in car financing allow predatory practices to thrive.

5. Credit Cards
Credit card debt in the US; how CARD Act reforms stopped many predatory practices without casuing higher rates or reducing access to credit.

6. Student Loans
Growth in student debt; federal vs private loans; reasons behind the increase in defaults; disappropriate impact of overdrafts.

Part 2: Debt Trap Lending

7. Car-Title Loans
Why these loans lead to high costs and frequent repossessions; federal and state consumer protections that are needed.

8. Overdraft Loans
How some banks charge overdraft fees on debit and ATM transactions; the manipulative practice of re-ordering of transactions.

9. Bank Payday Loans
How these loans have some predatory features as all payday loans; evidence of resulting long-term debt; recent regulatory & legislative actions.

10. Payday Loans
On $2.6 billion in loan churning; discussing their dangerous debt trap features; frequency of repeat borrowing; recommendations.

Part 3: Abusive Debt Collection & Debt Settlement

11. Debt Collection & Buying
Growth of debt collection and debt-buying industries; types of abuses; lack of business accountability; recommendations.

12. Debt Settlement
Overview of the industry; explanation of inherent risks for consumers; summary of consumer outcomes; recommendations for state, federal reform.

Part 4: The Cumulative Effect of Predatory Lending

13. Cumulative Impact of Predatory Lending
Demonstration of the cumulative high costs of lending abuses; lessons learned from efforts to address predatory lending; steps for further action.