From the beginning of the comment letter : The Center for Responsible Lending (CRL), National Consumer Law Center (on behalf of its low income clients) (NCLC), Americans for Financial Reform Education Fund, and Consumer Federation of America appreciate the opportunity to comment on the CDFI Fund (Fund) Small Dollar Loan (SDL) Program Application. The comments focus on aspects of the application aimed to ensure that the program is promoting affordable and responsible small dollar loan products. CRL is an affiliate of Self-Help Credit Union, Self-Help Federal Credit Union, and Self-Help Ventures...
Payday, car-title, and similar high-cost loans, typically with interest rates of 100% APR and higher, trap people in crippling long-term debt. CRL advocates for regulators to require lenders to verify borrowers can afford to repay a loan before that loan is issued. CRL also advocates for interest rate caps of no higher than 36% APR and for enforcement of current usury laws.
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On November 2, 2021, Marisabel Torres, director of California Policy, CRL testified before the House Task Force on Financial Technology. Her written testimony as well as her oral remarks are available for download. Watch the live hearing:
The Center for Responsible Lending (CRL), the Consumer Federation of America (CFA), the National Consumer Law Center (NCLC) (on behalf of its low-income clients), and the National Fair Housing Alliance (NFHA) submitted a comment on the Proposed Interagency Guidance on Third-Party Relationships with an emphasis the following points: A handful of FDIC-supervised banks are engaged in high-cost rent-a-bank schemes, which the FDIC should immediately prohibit. This proposed guidance, by its silence, could encourage more schemes. Other OCC- and FDIC-supervised banks are enabling high-cost credit...
The CFPB should rescind the Bureau’s November 2020 EWA Advisory Opinion or to revise its unsound reasoning to prevent evasions of credit laws. The CFPB should also revisit the December 2020 Compliance Assistance Sandbox Approval Order regarding PayActiv for the same reason, and to order PayActiv to cease misusing the order. We also urge the Bureau to eliminate or significantly alter the “innovation” programs adopted in the last few years, which have resulted in a secretive, one-sided process for industry to seek exemptions from or skewed interpretations of critical consumer protection laws...
The National Consumer Law Center (on behalf of its low-income clients) and the Center for Responsible Lending wrote to the CFPB to express serious concerns about two actions that the CFPB took a year ago under Director Kathy Kraninger finding that certain earned wage access (EWA) products are not “credit” under the Truth in Lending Act. These actions and the legal reasoning underlying them have the potential to open up huge loopholes in our lending and even fair lending laws. They urge the CFPB to regulate fee-based EWA products as credit. The CFPB should rescind or significantly revise the...
On July 29, 2021, Ashley Harrington testified before the Senate Committee on Banking, Housing and Urban Affairs hearing on "Protecting Americans from Debt Traps by Extending the Military's 36% Interest Rate Cap to Everyone." Her written testimony as well as her oral remarks are available for download. Watch the recorded hearing:
The following two comments oppose the National Credit Union Administration (NCUA or the Board)’s proposal to expand the activities in which credit union service organizations (CUSOs) are permitted to engage. This proposal will authorize predatory lending by credit unions, hampering household security at a time when greater security is badly needed. It will also increase racial discrimination, as families of color are disproportionately targeted with these harmful loans. Detailed comment from The Center for Responsible Lending (CRL), Self-Help Federal Credit Union, Self-Help Credit Union, and...
On April 28, 2021, Lisa Stifler testified in front of the Committee on Banking, Housing, and Urban Affairs during a hearing entitled, "The Reemergence of Rent-a-Bank?" Her written testimony as well as her oral remarks are available for download. Watch Lisa Stifler's opening remarks and the entire hearing:
The Office of the Comptroller of the Currency’s (OCC) “fake lender” rule is an existential threat to state interest rate limits that protect consumers from predatory lending. Since the American Revolution, states have limited interest rates to stop predatory lending. Forty-five states and the District of Columbia (DC) have interest rate caps on at least some installment loans, depending on the size. These laws are extremely popular. In recent years, Arizona, Montana, South Dakota, Colorado, and Nebraska have passed ballot initiatives, with overwhelming support, establishing or reaffirming rate...
The coalition of signatories to the letter consists of 325 groups, including civil rights, community, consumer, faith, housing, labor, legal services, senior rights, small business, student lending, and veterans organizations. The letter states that “[t]he rule replaces the longstanding ‘true lender’ anti-evasion doctrine with a ‘fake lender’ rule that allows lenders charging rates of 179% or higher to evade state and voter-approved interest rate caps merely by putting a bank’s name on the paperwork – just as payday lenders were doing in the early 2000s.”