CRL in the News

If you are one of the 77 million Americans who are hounded each year by debt collectors, the Consumer Financial Protection Bureau (CFPB) is taking on this $13 billion industry. At a July 28 field hearing in Sacramento, Richard Cordray, CFPB Director, announced the Bureau’s intent to rein in illegal practices that harass and rob consumers.

“Payday (loans) are costing people in states where it is legal… (up to) $8 billion in fees from (the) pockets of people that are living paycheck to paycheck,” said Susan Lupton, a senior policy associate with the Center for Responsible Lending.

“Payday (loans) are costing people in states where it is legal… (up to) $8 billion in fees from (the) pockets of people that are living paycheck to paycheck,” said Susan Lupton, a senior policy associate with the Center for Responsible Lending.

Auto-title loans, in which people borrow by using their vehicles as collateral, are arguably the most pernicious of payday lending’s mutant offspring: an estimated two million Americans borrow this way, earning lenders four billion dollars in fees every year. They’ve become particularly pervasive in Georgia. According to the Center for Responsible Lending, four hundred and nineteen car-title lenders were operating in the state in 2016, one for every 18,402 adult residents.

Nikitra Bailey, who oversees coalition building and constituent services at the Center for Responsible Lending, said that if bringing unbanked or underbanked Americans into the financial mainstream is a part of addressing income inequality, building off the CRA would be a logical place to start.

Graciela Aponte-Diaz, director of California policy at the Center for Responsible Lending, said the proposals "endorse the common-sense idea that people should not be harassed for debts they do not owe." But she expressed concern that some parts of the proposals don't protect consumers from unwarranted collection attempts.

If you are one of the 77 million Americans who are hounded each year by debt collectors, the Consumer Financial Protection Bureau (CFPB) is taking on this $13 billion industry. At a July 28 field hearing in Sacramento, Richard Cordray, CFPB director, announced the Bureau's intent to rein in illegal practices that harass and rob consumers.

Many payday loan borrowers aren’t able to repay the loan when it’s due and roll it over into a new loan, incurring new fees. The CFPB found that nearly half of borrowers had more than 10 transactions in the 12-month period covered in a survey. The Center for Responsible Lending found that payday loan borrowers are more likely to become delinquent on other bills; delay medical care; and in the worst scenarios, file for bankruptcy.

“Nearly five years following the creation of the Consumer Financial Protection Bureau, consumers are still calling for financial accountability,” said Mike Calhoun, CRL president. “Efforts to bring transparency and fairness to personal finance may have begun. But these new results signify that our work must continue. Every consumer is entitled to financial fairness.”

The first federal agency dedicated to serving the financial needs of consumers will be five years old on July 21. Created in the aftermath of the worst financial calamity since the 1930′s Great Depression, the Consumer Financial Protection Bureau (CFPB) was created through the enactment of the Dodd-Frank Wall Street Reform Act.