CRL in the News
A round-up of recent news related to the Military Lending Act:
The effort to roll back financial protections for military servicemembers by weakening the Military Lending Act has garnered lots of press attention.
It’s in military-heavy states, in military focused outlets, in national outlets, inside-the-beltway, and in finance-focused outlets.
Although an increasing number of states has passed laws to protect consumers by capping interest rates on payday loans, lenders have found creative ways to get around those regulations and issue loans with sky-high rates.
“We see payday lenders utilizing schemes just to get out from as many kinds of restrictions as they can,” said Diane Standaert, director of state policy at the Center for Responsible Lending, a nonprofit, nonpartisan organization focused on consumer lending.
“Given the opportunity, predatory lenders will target military service members and pull them into horrific debt traps,” said Scott Astrada, Center for Responsible Lending federal advocacy director. “The bipartisan Military Lending Act has helped put an end to these shameful practices. We applaud these senators for calling on the CFPB to fulfill its obligation of stopping loan sharks from preying upon service members and their families.”
Groups including the National Association for the Advancement of Colored People, the Center for Responsible Lending, and the Consumer Federation of America have endorsed the bill.
A report from the Center for Responsible Lending, “The State of For-Profit Colleges,” presents a state-by-state analysis of for-profit schools in America, and reveals that students in for-profit schools are generally less likely to graduate, more likely to borrow, are deeper in debt, more likely to default an have poor outcomes than students in public and private 4-year colleges. Further, Black people, women and the poor are disparately impacted.
The nonprofit research group Center for Responsible Lending said changes proposed by the federal Consumer Financial Protection Bureau could hurt Georgia’s military service members.
The federal agency’s interim director Mick Mulvaney said he doesn’t want his agency to be responsible for enforcing the Military Lending Act by proactively supervising banks, credit card companies, and other lenders.
Majorities of Republican and Democratic voters view the nation’s $1.5 trillion outstanding student loan debt as a “crisis,” according to a new poll commissioned by Americans for Financial Reform and the Center for Responsible Lending. The poll, being released this morning, also shows bipartisan concern over efforts by the Consumer Financial Protection Bureau to scale back efforts to protect student loan borrowers.
Additionally, Scott Astrada—federal advocacy director for the CRL—noted “…If its recommendations are adopted, more Americans would be pulled into deceptive, 100%+ APR loans with high-default rates. These products allow lender profits to soar as the borrower is pulled down into a financial free fall often resulting in involuntary bank account closure, a ruined credit score, and bankruptcy.”
As debit cards gained popularity, banks initially rejected transactions if users didn’t have enough money in their accounts, explained Rebecca Borne, of the Center for Responsible Lending, who contributed to the bill as well. Institutions quickly discovered, however, that enabling such transactions to go through and charging the customer a subsequent overdraft fee could be a handy source of income.
According to a recent poll released by the left-leaning Americans for Financial Reform (AFR) and the Center for Responsible Lending (CRL), 80 percent of American voters are “concerned about CFPB’s efforts to curb enforcement of fair lending rules, ending enforcement of payday lending rules and restricting public access its database of complaints.”