Payday and Other Small Dollar Loans

A legacy of racial discrimination in housing, lending, banking, policing, employment, and otherwise, has produced dramatically inequitable outcomes that persist today. Communities of color, often largely segregated due to the history of redlining and other racially exclusionary housing policy, experience higher rates of poverty, lower wages, and higher cost burdens to pay for basic living expenses. Payday loans cause particular...

The undersigned consumer, civil rights, and housing organizations welcome the CDFI Fund (Fund)’s efforts to more vigorously ensure that the primary mission of any CDFI is to promote community development. CDFIs are uniquely suited to promote community development and expand financial inclusion. At times, however, we see CDFIs use “financial inclusion” as the central purported justification for permitting irresponsible lending...

The Center for Responsible Lending, Self-Help Credit Union, Self-Help Federal Credit Union, and Self-Help Ventures Fund welcome the CDFI Fund’s efforts to more vigorously ensure that the primary mission of any CDFI is to promote community development. To that end, we urge the Fund to establish lending standards that function as clear, bright-line eligibility requirements for CDFI certification or renewal...

In 2008, Ohio voters affirmed capping the cost of payday loans in the state at 28% interest; however, payday and car-title lenders engaged in schemes to evade the voter-mandated cap, trapping consumers in a cycle of debt with APRs of over 500%. In 2018, Ohio lawmakers approved some restrictions on these lending schemes, but even with these 2018 changes, payday...

In the fall of 2017, after more than five years of outreach and research, the Consumer Financial Protection Bureau (CFPB) issued a regulation to address harms to consumers caused by payday loans, vehicle-title loans, and certain other loans with similar features. In July 2020, the CFPB issued a new rule that repeals core aspects of the 2017 rule. Payday and...

Ten years after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, with the country again facing an economic crisis, new polling data from Lake Research Partners, commissioned by the Center for Responsible Lending and Americans for Financial Reform shows that voters across all political parties are broadly and intensely supportive of strong consumer financial protections and of...

From the comment to the CDFI Fund on the Small Dollar Loan Program: The Center for Responsible Lending (CRL), National Consumer Law Center (on behalf of its low income clients) (NCLC), NAACP, Americans for Financial Reform Education Fund, Consumer Federation of America, and Public Citizen appreciate the opportunity to comment on the CDFI Fund (Fund) Small Dollar Loan Program (SDLP)...

In a September 3 letter to Acting Comptroller of the Currency, Brian Brooks, the Coalition for Responsible Lending wrote: We oppose the OCC’s proposed rule to permit lenders to use the rent-a-bank model to avoid North Carolina’s rigorously enforced interest rate cap. The OCC’s proposed rule will let predatory lenders off the hook for charging interest and fees in excess...

More than 100 community, consumer, civil rights, and faith organizations wrote to vigorously oppose the OCC’s proposed rule to gut the longstanding "true lender" anti-evasion doctrine. The proposed rule would trample state interest rate limits and unleash predatory lending in all 50 states, further exacerbating the economic impacts already experienced by COVID-19.

From the comment to the Office of the Comptroller of the Currency, Notice of Proposed Rulemaking, "National Banks and Federal Savings Associations as Lenders": We, the consumer and civil rights groups named above, write to strongly oppose the Office of the Comptroller of the Currency’s (OCC) proposed rule preempting the authority of states and courts to look beyond contrivances to...