CRL in the News

HR 3299 and HR 4439 would clear the way for payday lenders to evade state usury laws and make loans with triple-digit interest rates, by making deals to operate under a bank's charter. Diane Standaert, executive vice president and director of state policy with the Center for Responsible Lending, called it a "rent-a-bank" scheme that would void any state consumer-protection laws that cap interest rates.

“The numbers show that our current system is not working, and that higher education is not providing the pathway to financial stability that it once accomplished,” said Ashley Harrington, Policy Counsel and Special Assistant to the President of the Center for Responsible Lending. “We need federal and state policymakers to take concrete steps to effectively address this crisis, such as better regulation of for-profit colleges.

Ashley Harrington, special assistant to the president at the Center for Responsible Lending, a nonprofit aimed at fighting predatory lending practices, wants the government to change the way it sets federal student loan interest rates.

“Fifty years ago, Congress empowered HUD to dismantle legalized discrimination in housing to create opportunity for all as where you live is a factor in so many of life’s outcomes, including education and healthcare,” noted Nikitra Bailey, an EVP with the Center for Responsible Lending (CRL). “Rep. Waters’ new bill requires HUD to remain steadfast in its responsibility to foster inclusive communities free of discrimination so that all Americans have the ability to thrive.

Regardless of whether Otting has personally experienced discrimination, his position requires that he effectively enforce fair-lending laws, including the Community Reinvestment Act — a law that was enacted to address divestment in communities comprised of low-to-moderate income families, people of color and rural residents. The CRA has done important work to drive financial equity and ensure banks serve all communities where they have a financial footprint.

Of course, many borrowers might still be better off with loan forgiveness. But according to Ashley Harrington, a staff member at the Center for Responsible Lending, the problem is that most borrowers don’t realize this tax bill is coming. Harrington told the WSJ she is concerned about the average borrower’s ability to pay.

“The CRA has done important work to drive financial equity and ensure banks serve all communities where they have a financial footprint,” noted Scott Astrada, Federal Advocacy Director with the Center for Responsible Lending. “Comptroller Otting’s proposal to radically restructure the law should be closely scrutinized because, given his remarks, he is apparently oblivious to the historic and systemic discrimination that the CRA was enacted to eliminate.”

The CFPB needs these liberties, supporters say, to maintain its primary purpose in protecting American consumers of financial products and services. Within its seven years of operation, the CFPB has supplied 31 million Americans with over $12.4 billion in relief funds in cases of illegal financial dealings. “The 2008 financial crisis proved the need for the CFPB, a successful independent consumer watchdog,” Will Corbett, Litigation Counsel for the Center for Responsible Lending (CRL), said. “Under the radical logic of this court’s ruling, our consumer watchdog would be eliminated. The door

Borrowers generally are better off because they are having debt forgiven, but Ashley Harrington of the Center for Responsible Lending, a consumer-advocacy group, said many student-loan borrowers are unaware they will face a big tax bill. “We’re very concerned” about the borrowers’ ability to repay," she said.

But critics of the banks say the banks could be doing more under the current rules to expand whom they lend to, especially when they have so much spare capital. Michael Calhoun, president of the Center for Responsible Lending, said deregulation could lead to less lending. He asserted that possible changes to the Community Reinvestment Act could reduce the presence of banks in certain less well-off areas. “Is it too much for banks to provide basic banking services in their footprint?” Mr. Calhoun asked.