CRL in the News

Popular apps that provide cash advances for working people are trapping Minnesotans in a cycle of borrowing and repayment and increasing the rate of bank overdraft fees, according to an analysis by the Center for Responsible Lending.

In Minnesota, two-thirds of users of the apps — known in the industry as “earned wage access” apps — experienced increased overdraft fees after borrowing money. The average user overdrafted their bank account more than 9 times in the three months after their initial payout, according to the analysis by the Center for Responsible Lending. Rather than charging exorbitant interest...

“Earned wage access, or earned wage advance, is a marketing term for a loan,” said Monica Burks, a policy council at the Center for Responsible Lending. Burks said fees to get instant cash can be sky-high when expressed as an APR and that apps can trap workers in a pattern of repeat use.

“These lawsuits reinforce an oppressive student loan repayment system that favors the interests of big businesses at the expense of low-income borrowers and borrowers of color,” said Nadine Chabrier, Senior Litigation and Policy Counsel at the Center for Responsible Lending. “By choosing to protect the profits of exploitative loan servicers over students seeking relief from excessive loan repayments that limit...

It is encouraging that the market for solar power is sizable and expanding exponentially, but as this market grows, we must stop unethical companies from burning consumer rights.

Options include a home equity line of credit, home equity loan, reverse mortgage or home equity investment. The right loan product for you depends on your reason for needing the cash, says Anneliese Lederer, senior policy counsel for the Center for Responsible Lending in Washington, D.C.

In a study published this year, the Center for Responsible Lending found the average APR on pay advances repaid in 7 to 14 days was 367% (compared with 400% for a typical payday loan).

By law, the CFPB doesn’t have the authority to cap interest rates, but states do. According to the Center for Responsible Lending, 19 states and the District of Columbia have done so — usually imposing a limit of 36% APR. The federal Military Lending Act has long capped the annual interest charged on payday loans for military members and their...

“[BNPL] is marketed as interest-free, but consumers can find that they end up being charged more than they think they will,” Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending, told Vox last year. The Consumer Financial Protection Bureau seems to agree, ruling earlier this month that BNPL plans must be regulated like credit cards.

A 2024 study from the Center for Responsible Lending found a 56 percent increase in overdrafts from users’ checking accounts after an initial advance, as companies tried to collect their money. “If you have insufficient funds in your bank account, [these companies] will attempt to collect repayment on multiple occasions, so you could end up receiving multiple overdraft fees as...