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.
More than 4 million Americans are subject to wage garnishments for outstanding consumer debts and over 64 million people are being pursued by debt collectors, making them vulnerable to being sued for the wrong debt or the wrong amount of debt, among other predatory debt collection practices. People of color are more likely to be contacted by collectors and to be impacted by lawsuits resulting in wage garnishment and bank levies. CRL advocates for the protection of $1,000 per week in take home pay from wage garnishment and works to expose abusive debt collection and settlement practices.
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The Protecting Wages Act will keep more money in the pockets of working people struggling to pay rent and put food on the table, while still allowing the collection industry to collect debts. Protects Enough Wages for Basic Needs From Seizure: Protects $1,000 in disposable earnings per week from being seized for old debts, or 75% of disposable earnings, whichever protection is greater. Current law hasn’t been updated since 1968 and only protects $217.50 a week (or 75% of disposable earnings, if greater) from seizure–nowhere near enough to meet basic needs. Protects Consumer Purchasing Power...
Nearly 500,000 people are currently detained pretrial in jails around the United States, in part due to high bail amounts set by the judicial system that individuals cannot afford. That is a six-fold increase in the U. S. pretrial population from the 1970s, when it was closer to 83,000 people detained. Bail is money required in exchange for release from jail while one awaits trial. With bail costs rising, it has been difficult for individuals and their loved ones to afford paying a court directly for the full bail amount. Instead, they have increasingly turned to for-profit bail bond companies...
Debt collectors, including debt buyers, have weaponized the courts and frequently sue the wrong consumer for the wrong amount. Armed with a judgment, they use wage garnishment orders and bank account levies to seize money from families who are the least able to afford it. Research shows that nearly half of all Americans do not have enough savings to cover three to six months’ worth of living expenses, yet that is what people need to ensure that they can provide for their families. CRL is calling on the federal government to protect $12,000 in people’s bank accounts from being levied, per adult...
The Center for Responsible Lending, Legal Aid of North Carolina, North Carolina Justice Center, National Association of Consumer Advocates, Charlotte Center for Legal Advocacy, Financial Protection Law Center and Pisgah Legal Services partnered to filed this amicus brief in the North Carolina Supreme Court in Townes v. Portfolio Recovery Associates (PRA). Townes v. PRA is principally about the interpretation of CEPA, NC’s consumer protection statute, and its requirement that debt buyers to produce “itemized accounting” of alleged debts. Plaintiff Ms. Townes is advocating for a bare minimum...
Oportun is a California-based financial services provider that is rapidly expanding its reach. In some states, Oportun has announced its loans will be originated by MetaBank, indicating it is employing the “rent-a-bank” scheme, wherein lenders pay a bank with a national charter that is willing to pose as the lender so they can avoid having to comply with state consumer protections. Oportun had applied for a national charter of its own, but withdrew the application amid public scrutiny of its practices. Oportun has secured endorsements from influential Latino organizations in states where it...
From the coalition letter to Michael J. Hsu, acting comptroller of the currency, Office of the Comptroller of the Currency: We the undersigned community, consumer, and civil rights organizations write to express serious concerns about Oportun’s application to the Office of the Comptroller of the Currency (OCC) for a national bank charter. Exactly one year ago, Oportun made headlines for grossly abusive debt collection practices, which is especially alarming given the company’s stated focus on serving Latino, immigrant, and low-to-moderate income borrowers. ProPublica and The Guardian published...
“Oportun,” is almost a translation of the Spanish word for “opportunity,” but is a few letters shy of the full word: oportunidad . Unfortunately, Oportun’s practices leave people questioning just how much financial opportunity consumers receive as a result of using these products. “Partner with us today to build a better tomorrow.” “We’re committed to our community.” These messages and other similar ones, placed prominently throughout the Oportun website, could lead a consumer in the community to believe that this lender had their best interests in mind. Oportun’s designation as a Community...
Over the past 50 years, wage stagnation, as well as already high and rising housing, health care, and education costs have dramatically increased debt loads for the average family. Moreover, recovery from the Great Recession has been uneven. Data show that families of color, Americans born after 1970, and households earning less than $60,000 annually are the least likely to have recovered the wealth they lost in the financial crisis.2 And now, the COVID-19 health and economic crisis has laid bare existing inequities and will perpetuate these families’ economic struggles. Before the crisis...