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Press Releases

June 24, 2009
Ellen Harnick, Senior Policy Counsel for the Center for Responsible Lending contributed this guest post to "The Hearing", a blog of the Washington Post. Over the past decade, federal bank regulators looked the other way as responsible loans were crowded out of the market by aggressively marketed financial products carrying hidden costs and fees. Tricky products, whose most "innovative" feature was their ability to obscure their true cost, led a race to the bottom that stifled innovation of any benefit to consumers. The aggressive marketing of these products caused an enormous loss of...
June 17, 2009
National consumer protection organizations applauded President Obama's proposal to create a new federal Consumer Financial Protection Agency to ensure the safety, fairness and sustainability of credit. The agency would have broad powers to ensure that credit and payment products do not have predatory or deceptive features that can harm consumers or lock them into unaffordable loans. "The international economic crisis was triggered by the failure of federal regulators to stop abusive lending, particularly in the housing sector," said Travis Plunkett, Legislative Director of the Consumer...
June 17, 2009
"We commend the Administration for its innovative plan for protecting America's families from abusive lending practices, including those that led to the current mortgage crisis, as well as those involving costly overdraft bank fees and other small loans. As our country grapples with the current financial meltdown and its epidemic of foreclosures that have crippled the economy, we must address the regulatory lapses that brought us here. At the same time, we must protect consumers through targeted laws such as the credit card legislation Congress recently passed and the pending legislation...
March 23, 2009
Download Survey Findings U.S consumers overwhelmingly want to be asked their preference before a bank or credit union enrolls them in a program to cover debit card purchases when they do not have the funds, a new Center for Responsible Lending survey finds. Financial institutions typically enroll their customers in a system that covers debit card overdrafts and then assesses them an average $34 fee for each transaction, often on the purchase of an item that costs less than the fee itself. The new survey finds that most people would rather be asked if they want to be in such a program...
March 10, 2009
Statement of Mike Calhoun, President, Center for Responsible Lending   The Center for Responsible Lending commends Bank of America for its decision to stop charging overdraft fees on debit card purchases. With this change, Bank of America—which issues more debit cards than any other bank— joins another banking giant, Citibank, in practicing responsible debit card overdraft policies.   Most other large banks typically charge a $35 fee on an average debit card overdraft of only $17—an exorbitant cost for credit that the bank automatically repays itself only days later from...
February 10, 2009
No one likes overdraft fees: Who wants to pay $34 for a $5 hamburger? The public has until a March 30 deadline to tell banking regulators at the Federal Reserve Board whether a) banks should be required to let customers "opt in" to these high-cost lending programs or b) be allowed to continue automatically signing them up? Only the first of the Federal Reserve's proposed rules—the opt-in option---would be a real step toward reforming overdraft practices. That's because it would require banks to get a customer's permission before enrolling him or her in a costly overdraft program for...
December 22, 2008
Federal banking regulators yesterday withdrew proposed rules that would have largely failed to protect consumers from astronomically high-cost, unsolicited overdraft loans. The Fed then immediately issued a new proposal containing two alternative approaches. The impact the new proposal will have on abusive fees depends primarily on which approach the Fed ultimately chooses. Consumers pay $17.5 billion per year in overdraft fees that banks charge after routinely allowing consumers to overdraw their accounts by checks, ACH transactions, ATM withdrawals and debit card purchases. This exceeds...
December 19, 2008
Federal regulators issued credit card rules today that take a significant and welcome step to curb some of the industry's most unfair and abusive practices. Unfortunately, implementation of the rules won't take effect for 18 months and, in several key respects, don't go far enough to protect consumers. "Protecting consumers from the costly credit card practices that drain their wallets should always be a priority," said Center for Responsible Lending president Michael Calhoun. "But with a faltering economy showing no sign of improvement, consumers need to be able to hold on to hard-earned...
December 2, 2008
A new survey by the Federal Deposit Insurance Corp. underscores the need for regulatory and congressional action to stop banks from artificially increasing overdrafts without a customer's express consent, a practice that unfairly strips billions of dollars annually from checking accounts. The survey, taken of the banks the FDIC supervises, found that a majority of banks reported automatically enrolling customers into overdraft systems that impose a fee. Rules under consideration by the Federal Reserve Board would require banks to give customers the choice of opting out of the expensive,...
December 1, 2008
The Honorable Barack ObamaPresident-Elect of the United Statesc/o Presidential Transition TeamWashington, DC[Via electronic delivery to John Podesta, Larry Summers, Tim Geithner] Dear President-Elect Obama, We, the undersigned leaders of the nation's foremost consumer, community, civil rights and legal services organizations, write to you to state our urgent concerns regarding the need to guarantee consumer and marketplace protections as a fundamental principle guiding both your nominee selections and policy proposals for agencies that deal with housing and credit policy. Collectively,...

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