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Press Releases

November 19, 2015
Bill Creates Obstacles to Enforcing Fair Lending Laws The U.S. House of Representatives voted last night to pass H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act. The bill requires the Consumer Financial Protection Bureau to rescind its warning to lenders who provide auto loans through dealerships that certain practices risk violating fair lending laws. Auto dealers have discretion to raise the interest rate for which borrowers qualify and then keep some or all of the additional charges. This discretionary mark-up of interest rates has been shown to disproportionately...
November 13, 2015
A new policy brief from the Center for Responsible Lending (CRL) shows that most consumers would pay lower interest rates if car dealers stopped getting paid through increases in the interest rate. According to industry data, as many as 70% of borrowers would pay a lower interest rate if the car lending industry shifted to a flat fee compensation model. Borrowers of color would likely see the most savings. Car dealers have the ability to increase the interest rate on car loans above that for which the borrower qualifies, and keeps some or all of the difference as compensation. Dealer...
November 9, 2015
Predatory Fees Drained from Ohio Have Doubled in Past 10 Years According to a new report released today by the Center for Responsible Lending, payday and car title loans continue to burden Ohioans with unaffordable, triple-digit interest rate debt, draining millions of dollars a primarily from low-income people. These findings are the first look at the Ohio payday and car title lending market since Ohio voters went to the polls in 2008 to affirm capping the rate at 28% annually, a mandate which lenders have subverted through legal loopholes. "The flourishing payday lending practices in...
October 1, 2015
A new policy brief released today by the Center for Responsible Lending provides a state-by-state snapshot showing predatory payday and car title lenders increasingly moving into installment loans. The lenders are continuing to offer unsafe loans with excessive interest rates, which are carefully designed to trap borrowers in a cycle of debt they cannot escape, and actively seeking to expand into new states. The report highlights that just because lenders are making an installment loan, it is no guarantee that it is a safe loan. The report makes recommendations to regulators and policymakers...
July 14, 2015 | By Test
Today, the Consumer Financial Protection Bureau (CFPB) announced that it has reached a settlement with Honda Finance Corporation, which will result in the finance company paying $24 million in restitution to affected borrowers. Honda's past practices resulted in thousands of borrowers of color paying higher interest rates than white borrowers. The company will also change its lending practices to reduce discrimination, and submit to additional oversight to monitor for discriminatory impact. CRL Senior Vice President Chris Kukla released the following statement: The terms of the...
February 20, 2015
Equifax, the consumer credit reporting agency, recently released a report that it said refutes evidence pointing to a growing "bubble" in the subprime auto lending market based on the fact that credit scores were higher for people with subprime auto loans than for people who do not have an auto loan, ignoring the significant concerns raised by recent Center for Responsible Lending research. Equifax attempts to do so in two ways: Equifax argues that any problems in the market are overstated by looking at one data point: lender charge-off rates, and Equifax uses carefully chosen data...
October 31, 2014
For more information, contact Andrew High at Andrew.High@responsiblelending.org or 919-313-8533.
October 31, 2014
In a letter sent today to Consumer Financial Protection Bureau Director Richard Cordray, a group of civil rights and economic justice organizations, including the Center for Responsible Lending, asked the Bureau to use its regulatory authority to curtail discretionary auto dealer interest rate markups. Court cases and enforcement actions over two decades have shown dealer markups result in racial discrimination. Borrowers of color see their loans marked up more often and by a greater percentage. Most consumers have no idea the practice exists and that car dealers are adding extra...
September 18, 2014
Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that it intends to supervise the largest nonbank based auto lenders in a new "larger participant" proposed rule. The Bureau also announced that it has required indirect auto lenders to pay another $56 million to 190,000 consumers as redress for abusive practices, including dealer markup. According to the Federal Reserve Bank of New York, the lenders covered by the proposed rule accounted for more than half of the $355 billion auto loan market last year. Many lenders covered by the new CFPB rule are also deeply invested in...
September 17, 2014
Today, at a Consumer Financial Protection Bureau (CFPB) Indianapolis field hearing on auto lending practices, Center for Responsible Lending Senior Vice President Chris Kukla testified about abuses in the market. Kukla, who leads CRL's auto lending team, highlighted the auto dealer interest rate markup and a number of issues in the subprime auto loan market that have been the subject of recent media scrutiny. The text of Kukla's opening statement is below: Thank you, Patrice. Director Cordray, thanks also to you and your staff for holding this hearing, and for providing me the...

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