CRL in the News
Notably, the department considered and mentioned the ownership of each of the institutions in its announcement. That hasn’t traditionally been done, said Julia Barnard, a researcher at the Center for Responsible Lending, noting that CRL was glad to see individual owners held accountable. But the Biden administration could be doing more to help defrauded students, such as by providing group discharges for students who attended these institutions but didn’t apply for borrower defense to repayment, added Barnard.
As noted earlier, many major banks offer Bank On accounts. All told, these accounts are available at 40 percent of bank branches nationwide, according to David Rothstein, senior principal at CFE Fund, a nonprofit that leads the Bank On initiative and certifies these accounts. Still, these accounts might not be prominently displayed online, or consumers may get steered toward other types of accounts, says Peter Smith, senior researcher at the Center for Responsible Lending.
Small-dollar, short-term lenders, unburdened by a federal maximum interest rate, can charge borrowers rates of 400% or more for their loans. But more states are bringing that number down by setting rate caps to curb high-interest lending. Currently, 18 states and Washington, D.C. , have laws that limit short-term loan rates to 36% or lower, according to the Center for Responsible Lending. Other states are weighing similar legislation.
Listen to an interview with Kerri Smith of the South Carolina Fair Lending Alliance on Rhonda Rawlings on 107.3 JAMZ as they discuss the dangers of predatory lending in South Carolina.
Speed counts and any sluggishness is a particular problem now, Klein said. “That time delay costs American living on the edge millions, billions in fees,” he added. Banks collected approximately $11.7 billion in overdraft fees in 2019, according to study last year from the Center for Responsible Lending.
“While some of today's schemes might be dressed up a little bit fancier with the fintech aura than the older schemes, they still have the same rent-a-bank evasion,” said Lisa Stifler, director of state policy at the Center for Responsible Lending.
A wealth gap also persists based on education level, a separate report from the Center for Responsible Lending noted. For those who have a bachelor's degree or higher, the typical white household had $397,000 in wealth, while for Latinos it was $112,700 and for Blacks, it was $72,450. For whites with a high school education or less, household wealth was $105,590.