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Press Releases

May 2, 2008
New rules on overdraft practices proposed by federal banking regulators represent a significant acknowledgment that something is wrong with the banking system in the U.S., consumer groups said. Unfortunately, the proposed rules will largely fail to protect the billions of dollars in funds stripped from American bank accounts through excessive overdraft fees every year. Representatives from the Consumer Federation of America, Center for Responsible Lending, Consumers Union, U.S. PIRG, and the National Consumer Law Center are disappointed with new proposals issued by the Office of Thrift...
September 24, 2007
Good morning, I'm Eric Halperin, director of the Center for Responsible Lending's Washington office. I appreciate Congresswoman Maloney's invitation to join her this morning as CRL releases new findings in our ongoing investigation of overdraft lending. Our new report, "Billion Dollar Deal," finds that abusive overdraft loans are draining the checking accounts of young adults to the tune of nearly $1 billion per year. Colleges and universities are contributing to this problem by making deals that give a single bank exclusive access to their students without insisting on protections that...
September 24, 2007
Millions of college students and other young adults aged 18 to 24 have become unwitting participants in overdraft loans that cost them nearly $1 billion a year in fees, a report released today by the nonprofit research group, Center for Responsible Lending, finds. The report, "Billion Dollar Deal," says this age group -- which has been dubbed the "plastic generation" because of their reliance on debit and credit cards – pays over $3 in fees for every $1 borrowed in the form of a debit card overdraft. The resulting billion dollar bonanza for lenders -- often on small-purchase items such as...
July 11, 2007
U.S. banks and credit unions are using abusive overdraft loans to generate $17.5 billion in fees each year, according to a major new study, entitled "Out of Balance," from the nonprofit Center for Responsible Lending (CRL). The study finds that financial institutions are deliberately using overdraft systems that are designed to generate more overdrafts from customers, resulting in enormous fees for banks and credit unions. "Some of our largest financial institutions are hiding behind a smokescreen of misleading terms and murky practices that encourage costly overdrafts," said Eric Halperin...
June 12, 2007
Put muscle in predatory lending regulations, consumer groups urge Consumer advocates strongly urged the Department of Defense Monday to make significant changes to proposed federal regulations to ensure that predatory lenders can no longer strip earnings from U.S. soldiers and their families. As written, the regulations will leave loopholes large enough for payday, auto title and other predatory lenders to glide through, letting them gouge military borrowers without regard for a pending 36 percent interest rate cap, said the groups in a written response to the Pentagon's request for...
January 25, 2007
WASHINGTON, DC – Banks across the nation are taking advantage of the upward trend in debit card use to make high-cost overdraft loans more common and still costlier, according to a study released by the Center for Responsible Lending (CRL) today. "What banks are calling 'bounce protection' is starting to look more like a 'protection racket,'" said Eric Halperin, director of CRL's Washington office and a co-author of the report. "Banks are raking in fees from unwitting customers who would not overdraft if given a choice." The report, "Debit Card Danger," analyzed the checking...
August 11, 2006
A Defense Department study sent to Congress yesterday shows that Congress must stop predatory lenders from preying on our soldiers, sailors and aviators, said President Michael Calhoun of the nonprofit Center for Responsible Lending. The Pentagon report says payday lenders should charge no more than 36 percent annual percentage rates on their loans to service members, the same cap many states impose in their usury laws in order to ban loansharking. The report said these lenders damage morale and hurt our military preparedness. Payday lenders typically require borrowers to endorse a...
July 17, 2006
Martin Eakes, CEO of the Center for Community Self-Help, named Michael D. Calhoun president of the Center for Responsible Lending. Calhoun has lobbied and litigated for poor people and their issues, especially predatory lending, for more than 30 years. Calhoun, formerly general counsel, had been the center's lead lobbyist in Washington and state capitals for years. His acceptance of the post indicates that advancing CRL's issues in Congress and nationwide is becoming increasingly important to the organization, which also does research on predatory lending. Predatory lending occurs in...
April 24, 2006
A nationwide survey shows that low-income people, single people, and many people of color are increasingly turning to borrowing money from financial institutions by over-drawing their checking accounts, racking up interest rates that can exceed 1,000 percent. A telephone survey of 3,310 households done for the Center for Responsible Lending shows that a mere 16 percent of bank customers account for nearly three-quarters of all overdraft loans. In other words, these people are effectively turning to overdraft loans (or "courtesy overdraft protection," as it's often called) as a line-of-...
May 26, 2005
Download the Report High Cost & Hidden from View: The $10 Billion Overdraft Loan Market It is a product many people never asked for, don't want, and can't afford. Yet they wind up with it anyway. It's the overdraft loans that banks and other financial institutions make -- sometimes at interest rates well over 1,000% -- when customers overdraw their accounts. Some customers aren't even told when they're charged the fees, unwittingly racking up charges that exceed the amounts they borrowed. The nonprofit, nonpartisan Center for Responsible Lending estimates people pay more than...

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