Press Releases
March 20, 2023
OAKLAND, CA - The California Department of Financial Protection and Innovation (DFPI) proposed new regulations on Friday that would treat Earned Wage Advance (EWA) products as credit and require providers to disclose the true cost of the loan and abide by interest rate caps.
The Center for Responsible Lending (CRL) and other advocacy organizations have sounded the alarm as predatory fintech firms, like EWA providers, seek exemptions from consumer credit law in states around the nation. Providers claim the payday advances they market to consumers are not credit, and resist defining certain...
March 15, 2023
Predatory Puppy Loans, Rates up to 160% APR, and High Default Rates Justify Lower Grade on Serving Communities’ Credit Needs
WASHINGTON, D.C. – A coalition of consumer advocates submitted a letter to the Federal Deposit Insurance Corporation (FDIC) in connection with the agency's Community Reinvestment Act (CRA) examination of FinWise Bank. FinWise Bank’s lending through American First Finance, Elevate, and Opportunity Financial (OppFi), offering loans at up to 160% APR, raises serious consumer protection issues and fails to meet the convenience and needs of the communities...
March 14, 2023
Companies seek endorsement of payday-like products even in states with reasonable usury caps
DURHAM, NC -State regulators should treat earned wage advance products like loans and hold lenders to usury and credit standards to prevent these products from putting borrowers into an unaffordable cycle of debt, the Center for Responsible Lending (CRL) and other advocates will tell lawmakers today at a Vermont committee hearing.
An increasing number of lenders are marketing so-called Earned Wage Advance (EWA) loan products that are similar to payday loans, and are seeking endorsement in...
February 6, 2023
Consumer Advocates Urged FDIC to Downgrade the Bank’s CRA Rating Over its Triple-Digit Interest Rate Rent-a-Bank Loans, Deceptive Marketing
WASHINGTON – Late last week, the Federal Deposit Insurance Corporation (FDIC) made public that it has downgraded the Community Reinvestment Act (CRA) performance rating of Transportation Alliance Bank (TAB Bank) to “needs to improve,” a low rating that few banks get. The FDIC found that the Utah-based bank committed unfair or deceptive acts or practices that “impacted a large number of consumers over an extended period of time."
Consumer...
December 21, 2022
WASHINGTON, D.C. – Center for Responsible Lending (CRL) Senior Policy Counsel Nadine Chabrier issued the following statement:
“Holiday shopping is ramping up and shoppers are increasingly using new, underregulated credit products like ‘Buy Now, Pay Later’ and ‘Earned Wage Access.’ Retailers are also facilitating predatory point-of-sale loans for purchases including for puppies and jewelry. Policymakers should use this moment to recommit to strengthening consumer protections. Holiday dreams should not turn into debt nightmares.”
For decades, payday lenders have exploited low-income...
December 15, 2022
Lenders squeeze borrowers with large balances, long terms, expensive and unnecessary add-on products
DURHAM, NC – Large, personal loans demand scrutiny from regulators and lawmakers in Colorado and elsewhere to ensure practices that harm consumers are stopped, concludes an analysis released today by the Center for Responsible Lending (CRL).
Analysis of loan agreements, industry reports and company websites show disturbing and costly practices by two large consumer finance companies, OneMain and Lendmark. The lenders are operating in Colorado under the Consumer Credit Code, which allows...
December 6, 2022
Washington, D.C. — Today, a broad coalition of financial services and consumer organizations wrote a letter expressing support for new legislation to close the industrial loan company (ILC) charter loophole, the “Close the Shadow Banking Loophole Act.” The legislation, introduced by Senate Banking Committee Chairman Sherrod Brown (D-OH), Sen. Bob Casey (D-PA) and Sen. Chris Van Hollen (D-MD), prohibits shadow banks and nonbank commercial entities from taking advantage of legal loopholes. These loopholes allow these companies to control a full-service FDIC-insured depository institution...
November 16, 2022
New Product is Credit and Should be Regulated as Such
WASHINGTON, DC – As the shopping season arrives, the Center for Responsible Lending (CRL) today released a short video explaining concerns about the exploding Buy Now Pay Later market and calling for the credit product to carry the same protections as credit cards.
Buy Now Pay Later offers appear online as consumers are shopping for a wide range of products. In the typical arrangement, shoppers can opt to make four payments over six weeks. While this could be convenient, the product may have hidden costs and risks, including late...
October 20, 2022
WASHINGTON, D.C. – After a panel of judges on the U.S. Court of Appeals for the Fifth Circuit ruled that the Consumer Financial Protection Bureau’s (CFPB) funding structure was unconstitutional, Mike Calhoun, president of the Center for Responsible Lending (CRL), issued the following statement:
The court’s misguided opinion would stop the Consumer Financial Protection Bureau from providing critical protections for American families.
This ruling would undermine the consumer bureau’s effectiveness as an independent watchdog. It would let payday lenders continue to offer financial...
September 26, 2022
CRL: 85 percent of survey respondents suffer negative consequences from larger, longer-term loans with triple-digit interest
WASHINGTON, DC – High-cost installment loans, taking a rising share of the lending market over the past decade, often compound borrowers’ financial problems, according to new research released today by the Center for Responsible Lending.
The report, “Unsafe Harbor: The Persistent Harms of High-Cost Installment Loans,” provides a rare look at the significant challenges high-cost personal installment loans create for many borrowers. These challenges include the...