CRL in the News
Information isn't getting to many people on how they can pay off payday loans, which can have an interest rate of up to 400%.
About 75% of these business fees are being generated from more than 10 loans a year per person. It's really a debt trap by design. Payday lenders succeed by rolling over loans and getting more loans.
A new study found that even creditworthy shoppers may be unable to find traditional mortgages. But the arrangements often lack typical consumer protections.
“We have this distorted cross-subsidy where the biggest revenue on checking accounts is coming from the people with the least money, and they’re subsidizing the checking accounts of those with more money,” said Mike Calhoun, president of the Center for Responsible Lending.
"Overdraft fees kick people when they are down," Nadine Chabrier, policy and litigation counsel for the Center for Responsible Lending (CRL), said. "Their costs are borne by financially vulnerable consumers. These fees disproportionately harm Black and Latino Americans with a bank account. Overdraft fees are also one of the most common reasons people lose their bank accounts.
Read an op-ed by CRL's Jaylon Herbin on the $1.7 trillion student debt crisis that is further widening our country’s racial wealth gap
That $28 billion is made up of almost 350,000 loans, most of which are for less than $25,000 each.
That lingering debt is creating a burden for the smallest businesses, including many run by minority entrepreneurs, say advocacy groups, community leaders and business owners. Some borrowers who say they meet the criteria for forgiveness are struggling with technical snafus, onerous documentation requirements and confusing websites.
"We must come through for the most vulnerable," said Aracely Panameño, former director of Latino affairs at the Center for Responsible Lending.
Advocates are also asking the SBA to rescind a rule denying forgiveness to borrowers who made good-faith errors and eliminate 'gotcha' denials of loan forgiveness due to sudden rule changes.
"TAB Bank is misusing its bank charter by fronting for abusive loans that bleed consumers dry," Nadine Chabrier, policy and litigation counsel at the Center for Responsible Lending, said Tuesday in a statement. "Responsible merchants should stop peddling predatory EasyPay loans, and the FDIC should end TAB Bank's participation in this scheme." The FDIC declined to comment. EasyPay and TAB Bank did not return requests for comment.