Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The results are presented in categories as short Powerpoint-style slide decks with key takeaways, charts, and maps. Dangers of Rent-a-Bank Schemes Bipartisan Support for Stopping Predatory High-Interest Loans Broad Support for Interest Rate Cap Among Payday Loan Borrowers
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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For most of Michigan’s history, state laws prevented payday lenders from operating, most recently by limiting interest on consumer loans at 25%. However, in 2005, Michigan became the last state to authorize payday lending when payday lenders pushed for a carve out allowing them to charge rates of 340% APR or higher. Payday lenders drain over $103 million in fees from Michigan residents every year. Now, they want the ability to make longer-term loans at APRs as high as 200%. Michiganders do not want payday lending to expand. Instead, Michigan needs reform proven to stop the debt trap—a true...
Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps. Key findings include: Two-thirds of voters (66%) are concerned about the ability of high-cost lenders to arrange loans through banks at rates higher than the state laws allow. One in three Republicans, independents and Democrats are strongly concerned about this practice. Across all 50 states and the District of Columbia, a majority (60-69%) of the population is concerned...
We, the consumer and civil rights groups named above, write to strongly oppose the Federal Deposit Insurance Corporation (FDIC)’s proposed rule on Federal Interest Rate Authority (proposal or proposed rule). The proposed rule would allow predatory non-bank lenders to route their loans through banks to evade state interest rate caps. The proposal is outside the FDIC’s statutory authority; it is not justified by any evidence of problematic impact on legitimate bank operations; and the FDIC has failed to consider the strong likelihood that the proposal will unleash a torrent of predatory lending...
Borrower story from the testimony of Graciela Aponte-Diaz: California borrower story: I currently have an installment loan in the amount of $2600.00 from Speedy Cash . . . . At the same time, I also have [x] $300.00 payday loans from [x] different storefronts in my neighborhood, including Speedy Cash. So basically, I have both a $300.00 payday loan from Speedy Cash and a $2600.00 installment loan. Is that legal? I am drowning in debt and I can't handle it anymore. I need some relief. This is very stressful and expensive for me, and I don't know what to do . . . . . I 've been paying about $140...
The undersigned community, consumer, civil rights, faith and small business organizations write to strongly oppose the FDIC’s proposed rule on “federal interest rates,” which threatens to eviscerate state interest rate limits around the country and encourage the spread of predatory lending. Download the letter to continue reading. (PDF)
The Center for Responsible Lending and the National Consumer Law Center (on behalf of its low income clients), as part of a coalition of consumer and civil rights groups wrote the comment letter included on this page, which details the groups' strong opposition to a proposed rule from the Office of the Comptroller of the Currency (OCC)’ . The proposed rule would allow predatory non-bank lenders to launder their loans through banks to evade state interest rate caps. The proposal is outside the OCC’s statutory authority; it is not justified by any evidence of problematic impact on legitimate...
From the letter : Interest rate limits are the single most effective tool states have to protect their residents from predatory loans. Predatory loans include payday and car title loans that often carry annual interest rates as high as 300% or more. Predatory loans also include high-cost installment loans and lines of credit with rates approaching and well exceeding 100%. These loans target financially distressed individuals, compound their debt burden, and leave them worse off. Payday lenders also disproportionately prey on communities of color, stripping them of income, exacerbating...
From the introduction of the brief : Since the founding of our nation, states have limited interest rates as the primary protection against predatory lending. Evasions of usury laws are as old as the laws, but courts consistently look beyond form to the substance of the transaction to prevent subterfuge. Ever since banks were provided with legislative exemptions from state usury laws, nonbank lenders have tried to use “rent-a-bank” arrangements to avoid state interest rate laws. But courts look beyond the nominal bank that funded and put its name on a loan, holding that state usury laws apply...
From the introduction of the brief : Since the founding of our nation, states have limited interest rates as the primary protection against predatory lending. Evasions of usury laws are as old as the laws, but courts consistently look beyond form to the substance of the transaction to prevent subterfuge. Ever since banks were provided with legislative exemptions from state usury laws, nonbank lenders have tried to use “rent-a-bank” arrangements to avoid state interest rate laws. But courts look beyond the nominal bank that funded and put its name on a loan, holding that state usury laws apply...