Press Releases
October 11, 2016
The Center for Responsible Lending (CRL) and California Reinvestment Coalition (CRC) lauded California members of the U.S. Senate, U.S. House of Representatives, California State Legislature, city and county officials, and California Attorney General Kamala Harris for sending official statements to the Consumer Financial Protection (CFPB) calling on the agency to strengthen its proposed rule on payday and car title lending.
The California lawmakers and attorney general highlighted that the proposed rule is a step in the right direction, but underscored that more needs to be done to ensure...
October 7, 2016
Rule Should Protect Families From Debt Traps, Close Off Paths to Evasion for Predatory Payday Lenders
Today, the Center for Responsible Lending (CRL), the Consumer Federation of America (CFA), and the National Consumer Law Center (NCLC) (on behalf of its low income clients), with support from seven national consumer and civil rights organizations, is sending the Consumer Financial Protection Bureau (CFPB) a joint comment urging the CFPB to strengthen its proposed rule on payday and car title lending. The organizations’ comment reflects the decades of research and work these groups have...
September 27, 2016
On September 26, the Consumer Financial Protection Bureau (CFPB) levied a $9 million fine against TitleMax parent company TMX Finance LLC for failure to tell consumers the terms and costs of auto-title loans sold over a 5-year period, beginning in 2011. The lender was also charged with illegally exposing consumers' personal information to their employers and references.
Offering auto-title and personal loans at 1,300 stores in 18 states, TMX is barred from making in-person visits to collect debts and encouraging customers to take longer time to pay a 30-day loan.
CRL's Delvin Davis, a...
September 7, 2016
In an August 31 ruling, the Consumer Financial Protection Bureau (CFPB) secured a critical win in a suit against California-based payday and installment lender for “servicing and collecting full payment on loans that state-licensing and usury laws had rendered wholly or partially void or uncollectible.”
In an action to enforce the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB filed the suit in 2013 against CashCall and its affiliates, which partnered with another company, WesternSky, and claimed that tribal law rather than state law applied to their loans. The federal...
August 18, 2016
New research finds that in states without triple-digit payday loans, 90 million consumers save more than $2.2 billion each year that would have otherwise been paid to lenders. These costs savings also bring fewer long-term financial harms such as bankruptcy. The research shows that consumers in payday-free states have multiple ways to manage temporary cash shortfalls and at a fraction of the cost of payday loans.
As the Consumer Financial Protection Bureau receives public comments on how its proposed rule could close loopholes, the new research is particularly timely. A number of strong...
June 20, 2016
As representatives of consumer, community, religious and civil rights organizations, we applaud the Consumer Financial Protection Bureau (CFPB) for releasing a strong proposed payday and car title lending rule and urge the Bureau to close some concerning loopholes that would allow some lenders to continue making harmful loans with business as usual.
At the heart of the CFPB's proposed rule released earlier this month in Kansas City, Missouri, is a common sense principle—that lenders should be required to determine whether or not a consumer has the ability to repay a loan without hardship...
June 2, 2016
The Consumer Financial Protection Bureau (CFPB) today released proposed rules that, if strengthened, could rein in the worst abuses of payday and car-title lending. As written, however, the rule contains exceptions and loopholes that abusive lenders will use to evade the rule's protections and continue to trap vulnerable borrowers in unaffordable 300-plus percent interest loans.
In response to the proposed rule, Mike Calhoun, CRL President, issued the following statement:
At the heart of this proposed rule is the reasonable and widely accepted idea that payday and car title loans...
May 18, 2016
The Consumer Financial Protection Bureau (CFPB) today released a research report on car-title lending that underscores earlier independent findings by the Center for Responsible Lending (CRL). Car title loans are high-cost, high-interest loans secured by the title of a vehicle the borrower owns outright. After analyzing millions of records, CFPB found that:
One in five borrowers have their vehicles repossessed;
80% of loans are not retired when due;
Two-thirds of all lender volume comes from borrowers stuck in seven or more loans.
These findings are consistent with...
May 18, 2016
Damning Report on Car Title Loans, New Figures on Consumer Fee Drain, Heighten Calls for Strong National Rule
Earlier today, the Consumer Financial Protection Bureau (CFPB) announced plans for a field hearing that may serve as the backdrop for unveiling a proposed national rule governing a range of abusive small-dollar lending practices. The announcement was made the same day the CFPB issued a report detailing the devastation wrought by one of these practices, car title lending, finding that one in five borrowers has their car seized due to inability to repay – and a day after the Center...
May 17, 2016
New research from the Center for Responsible Lending finds that every year, $8 billion in fees is lost to one of two types of small-dollar, predatory lending: payday and car-title loans. Usually sold to consumers with average incomes of approximately $25,000, these loans may have different names; but both charge triple-digit interest rates that generate the bulk of their debt trap fees. These fees leave most borrowers renewing rather than retiring the loans.
The new report is the first update since 2013 that tracks fees charged state-by-state to these two predatory products. These billion-...