CRL in the News
Minneapolis-based U.S. Bank last week began offering a small-dollar loan product called Simple Loan that charges interest rates ranging from more than 70 percent to almost 88 percent.
"This type of product isn't a safe alternative to a payday loan," Rebecca Borne, senior policy counsel at the center, said in a statement. "And we reject the notion that bank loans as high as 70 [percent] to 88 percent [annual percentage rate] will drive out higher-priced credit by nonbanks."
If you’ve defaulted on a federal student loan, beware: The federal government can take up to 15 percent of your Social Security benefit.
The trade group representing payday lenders has asked a court for an injunction to block implementation of the Consumer Financial Protection Bureau's (CFPB) small dollar loan rule.
The CFPB small dollar loan rule is scheduled to take effect next year, but a larger threat to payday lenders may come in the form of competing products from traditional banks. Last week, U.S. Bank rolled out its Simple Loan, which charges a similar fee for a small dollar loan but gives the borrower three months, instead of two weeks, to pay it back.
Consumer advocates say strong reforms are needed to better regulate the payday lending industry in Michigan, and they just might have the data to prove it.
U.S. Bank says it will offer nearly instant small loans to its customers, becoming the first bank to provide such a product since federal regulators cleared the way earlier this year amid continuing concerns over the costs of payday loans.
Graciela Aponte-Diaz of the nonprofit Center for Responsible Lending said she’s particularly concerned about U.S. Bank customers who take out larger loans under the new program because borrowers only have three months to repay.
The Consumer Financial Protection Bureau is set to revive a program that would allow companies to experiment with new forms of disclosures without facing regulatory penalties.
The CFPB could allow for disclosure innovation without giving up its enforcement and oversight tools, Scott Astrada, the director of federal advocacy at the Center for Responsible Lending, told Bloomberg Law in a Sept. 7 phone interview.
“It’s far end of the spectrum of possible ways to tweak or improve things,” he said.
On this tenth anniversary of the financial crisis, there have been many retrospectives on the US government’s response to that catastrophe, with more to come. The commentary to date has largely focused on the extraordinary measures taken to prevent a much deeper collapse of the American and global economies. Measures were implemented to address the immediate crisis and reduce the likelihood of a repeat event. Both had a significant impact.
For many students, the path toward enrolling in a for-profit college starts with an advertisement—maybe while browsing online or watching a favorite television show. Either way, the message is usually the same: Get off the couch and do something with your life.
Lawsuits filed by homeowners, city governments and nonprofits like the American Civil Liberties Union accuse Wall Street banks of targeting African-American and Latino customers with predatory loans leading up to the financial crisis.
“In many ways, we had a dual credit market where they were just getting pushed into the riskier side of the market, and a lot of that activity was stemming from mortgage brokers who were pushing loans,” said Nikitra Bailey, executive vice president of the nonprofit Center for Responsible Lending.
Listen to an interview with Lisa Stifler on the Steve Gruber Show about the dangers of payday loans. Lisa also discusses some of the research findings in CRL's new report, Power Steering: Payday Lenders Targeting Vulnerable Michigan Communities.