CRL in the News
Congress recently did the right thing by giving Americans suffering under the economic impact of the coronavirus a big break on their mortgage payments. If you've lost your job or seen a drop in your income because of the virus, and your mortgage is backed by the government, you can get up to six months of forbearance on your mortgage. If at the end of that period you are still under financial stress, you can get six more.
Complaints about student debt cancellation being regressive doesn’t acknowledge there are very big differences in terms of income and wealth.
With the coronavirus pandemic spreading throughout the United States and crippling the economy, Congress moved quickly to approve a $2 trillion relief bill, which President Donald Trump soon signed. Included in the bill is relief for borrowers of certain types of student loans -- they'll see their interest frozen and payments suspended through at least Sept. 30.
“Lenders who charge extremely high rates don’t have a lot of incentive to care whether customers succeed on their loans or not because they make so much money on interest, they can lose the principal and still make money,” Borné says.
According to the Center for Responsible Lending (CRL), 70% of the people who graduated from college in 2016 have student loan debt with an average of $30,000 — and the problem gets worse for communities of color, says Ashley Harrington, federal advocacy director at the Center for Responsible Lending. “We definitely think we have to do something about this crisis,” Harrington told Yahoo Finance’s YFi PM.
Those directives are likely to make it harder for the CFPB to deploy the abusiveness standard, said Will Corbett, director of litigation at the Center for Responsible Lending. “The CFPB is deliberately tying the hands of its enforcement and supervision of abusive acts practices,” he said.
Ashley Harrington, senior policy counsel for the Center for Responsible Lending, celebrated the decision, but said student debt that impacts low-income and minority borrowers more than any others should be addressed long before debtors end up with interest-bloated loans. “