The Center for Responsible Lending (CRL) began 2020 prepared to execute its plan of creating stronger consumer protections to spur wealth building opportunities for low-to-moderate income families and communities of color. To that end, our efforts were directed to regulatory and legislative solutions that could deliver more equitable opportunities for underserved communities. These plans were adjusted to apply CRL’s seasoned expertise gained during the Great Recession to help ensure that hardworking families – already hardest hit – were not left behind as a result of the economic fallout from the global pandemic. A critical lesson from 2008 is that without targeted relief, Black and brown families would end up in a worse position as the housing crisis cost them $1 trillion in wealth that had yet to be recovered.
As leaders in the movement to meet these extraordinary challenges, we recognized the urgency. We acted quickly and decisively. We knew we had to be precise in creating solutions that would ensure that low-to-moderate income families received their fair share of pandemic relief. And, as the national reckoning on racism began, we strengthened our push for changes in financial services to address structural and ongoing discrimination that hurts communities of color and holds back the economy. CRL’s leadership was pivotal during this unprecedented time in securing equitable relief from Congress for economically vulnerable communities.
Dear Friends:
CRL’s impact through COVID-19 and a national reckoning on racism resulting from police killings of Black and Hispanic men and women—plus increased incidents of violence targeted at Asian-American and Pacific Islander communities—was considerable in a year like no other. From March onward we played an integral role in stimulus negotiations alongside civil rights, housing policy, and industry advocates to provide protections from evictions and foreclosure, as well as promote targeted funding programs to address existing disparities. This included the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act).
The last COVID relief bill of 2020, 5600 pages long, was signed into law the last week in December. It combined approval of the 2021 federal budget, the Senate COVID relief bill, and separate pending and unrelated bills. We knew it was not expansive enough to bring necessary relief and stability to many Americans, especially for Black and brown communities that experienced the worst health and financial impacts of the unrelenting global pandemic. The hard fight had been bolstered by CRL and ally advocacy efforts on the Paycheck Protection Program, the core small business response to COVID. We made certain that the smallest of small businesses received more relief, community development financial institutions (CDFIs) and minority depository institutions (MDIs) with track records of serving small businesses of color participated fully, and demographic data would be collected. Far more than mere stimulus, these were survival packages.
The social unrest stemming from police killings starkly raised the extreme inequality in our society and the need for us to do all we could at CRL, both internally and externally, to address it. We issued a statement in support of the people-led protests, speaking out against violence targeted at Black and brown people, including increasing discrimination faced by Asian-Americans and Pacific Islanders, while calling for necessary accountability and federal reform for police misconduct. Your generous support has enabled us to pursue this important work.
None of us have all the answers. However, through our collectiveness, we can forge a path forward that builds toward a more just and fair society for all of us.
In gratitude,
Mike Calhoun
COVID-19 Economic Relief and the Black CommunityMay 18 Facebook Live Town Hall
Watch Nikitra Bailey, CRL Executive Vice President, discuss how COVID response must address structural harms to communities of color at 44:32.
COVID-19 Economic Relief and the Black Community
May 18 Facebook Live Town Hall
Watch Nikitra Bailey, CRL Executive Vice President, discuss how COVID response must address structural harms to communities of color at 44:32.
We must look to America’s history to understand why people of color are held back by debt in the present. Slavery, Jim Crow, racist housing, and Veterans Administration policies—all are the legacy of legal, structural discrimination. The root of the remedy is to ensure that Black and brown people have access to the fair and inclusive credit they need for lasting economic security. Our guiding principle? Collaborative leadership that creates opportunity and resources for those denied. Key to our success? Collective power through partnerships at the federal level and in states. Our inspiration? The late Congressman John Lewis—a fighter for peace, justice, equality, and freedom—whose legacy is a shining example of what public service ought to be.
Making Homeownership a Viable Option for All Is Essential for Thriving Communities
CRL was founded nearly 20 years ago to curb toxic, wealth-stripping mortgages that were offered to families of color and in low-income communities across the country. Access to credit and advocating for homeownership opportunities are still top policy priorities.
The Black homeownership rate is 42% while the non-Hispanic white homeownership rate is 72.1%, a difference of 30.1%. That gap is higher than the 27% difference in 1960, when discrimination was legal and before passage of the Fair Housing Act. Despite this reality, in 2020 the Trump Administration gutted protections as people were losing their homes. This is regress, not progress.
Mitigating Consumer Debt Ensures Full Participation in the Economy
Before the pandemic, US household debt was on the rise, reaching more than $14 trillion as 40% of Americans have not recovered from the Great Recession. Student debt, payday and small dollar loans, and egregious consumer debt exacerbate persistent and growing wealth disparities. CRL’s ongoing work, particularly at the state level in light of federal inaction, is bearing fruit.
Supporting Small Businesses Owned by People of Color Strengthens Communities and the Nation
Businesses owned by Black and brown people are a proven mechanism for wealth building and job creation. We instantly knew that targeted support to small business was key to an equitable pandemic recovery. Our affiliation with Self-Help, a small business lender, informed our approach to policy prescriptions to address the needs of this crucial, and historically underserved, group.
In April, as businesses shuttered and more than 22 million unemployment claims were filed in the first month of the crisis alone, CRL drew on lessons learned from 2008 that public health and economic impacts would worsen over time. Income shortfalls resulted in missed bill payments, adding late fees to swelling debt burdens. Homes and affordable rental housing were in jeopardy. We knew that state governments would face massive budget shortfalls because of COVID, and that proposals to make significant cuts to critical social support services such as health care, education, and higher education would inevitably follow.
CRL presented comprehensive recommendations to confront and adapt to pandemic fallout broadly among policymakers, allies and coalition partners, and in outreach efforts.
View CRL's complete state consumer protection policy recommendations.
In addition to debt cancellation as a remedy for student borrowers, CRL is carefully tracking loan servicing at the state level. In December, CRL relaunched the North Carolina Coalition for Responsible Lending to heighten awareness of the issue, gather personal accounts of abuses, and strengthen our case before the General Assembly. Trey Roberts recounted his experience with student loan debt. CRL led the development of draft student debt servicing legislation, began the effort to secure bill sponsors, and was an active presence in the media. The effort was bolstered by a public statement of support that included more than 30 names and organizations.
View the public statement.
Trey Roberts was motivated by a future beyond his NC hometown but concerned about taking on debt. He waited a few years after high school to enroll at Nash Community College before taking the big step to his 2018 diploma from William Peace University in Raleigh. Trey is a proud member of the Haliwa-Saponi Tribe and holds a position with Dix Community Park in Raleigh, NC. He told his story of navigating the federal student loan "maze" to the NC Coalition for Responsible Lending, having to figure out forms with the help of a roommate and Google. Trey sacrificed his health care for two years while determining that an income-based repayment plan would get him on a better path.
Watch Trey tell his story.
NOTE: Grants and Contributions include multi-year commitments provided in 2020 and do not reflect funds available to be spent in 2020.
CRL extends our deepest gratitude for your generous support of our mission.
*Donor advised funds are included among institutional donors
#DoddFrank10
2020 marks the tenth anniversary of Consumer Financial Protection Bureau (CFPB)! This discussion of the Dodd-Frank Wall Street Reform and Consumer Protection Act recognized progress in consumer protections and celebrated the establishment of the CFPB. Congresswoman Maxine Waters and U.S. Senator Elizabeth Warren participated with representatives from NAACP, National CAPACD, National Fair Housing Alliance, and UnidosUS.
Watch a recording of the all-star panel discussion.
ONLY 42% of Blacks and 48.1% of Hispanics are able to achieve homeownership
>44M Americans owe >$1.6 trillion in student loan debt
Consumer debt reached $14.56 trillion at the end of 2020 and communities of color are disproportionately affected—39% experienced debt collection compared to 24% in white communities
COVID-19 upended the labor market with an unemployment rate of 14.8% (the highest rate observed since data collection began in 1948) and a public health impact resulting in the loss of nearly 400,000 lives
18 states now ban payday lending within their borders, Nebraska most recently by voters at the ballot
>6 times CRL delivered testimony at the state and federal level
>23 comment letters
on issues ranging from mortgage to payday lending to regulatory activity
6 litigation actions
including the CFPB’s political independence, the payday lending rule, rent-a-bank, and consumer debt
21 publications
including research reports, factsheets, issue briefs, and consumer polls
Nearly 1,700 organizations and individuals joined us in signing onto letters to Congress
CRL’s efforts are made possible by the generous support of foundations, companies, law firms, and individuals committed to financial fairness. All gifts made to CRL are tax deductible to the fullest extent of the law.
Learn more on CRL's website.
CRL’s expertise and experience in financial services is informed by our affiliation with Self-Help, a national community development lender.
View the Self-Help 2020 annual report to see the latest impact numbers.
North Carolina
302 West Main Street
Durham, NC 27701
919.313.8500
California
1970 Broadway Suite 350
Oakland, CA 94612
510.379.5500
District of Columbia
910 17th Street NW Suite 800
Washington, DC 20006
202.349.1850
