Press Releases
March 22, 2005
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Race Matters: The Concentration of Payday Lenders in African-American Neighborhoods in North Carolina
DURHAM, NC -- Payday lenders who trap people in triple digit-interest loans locate their stores in African-American neighborhoods in higher concentrations, according to a report by the Center for Responsible Lending (CRL).
African-American neighborhoods in North Carolina have three times as many payday lenders per capita as white neighborhoods, even after controlling for variables associated with the industry's purported customer base such as income and...
March 16, 2005
WASHINGTON, D.C. -- A new bill in Congress would demolish many of the protections states and the federal government have carefully erected against predatory lenders and would expose millions of homebuyers to the loss of their savings and even their homes.
The bill by Congressmen Robert Ney of Ohio and Paul Kanjorski of Pennsylvania would preempt state laws proven effective at curbing abusive lending and replace them with a weak federal standard.
The Center for Responsible Lending, a nonprofit, nonpartisan policy and research group, urges Congress to reject this bill in its current form,...
March 10, 2005
WASHINGTON, D.C. -- A bill by Rep. Brad Miller, Rep. Mel Watt and Rep. Barney Frank, the ranking Democrat on the House Finance Committee, would protect homeowners from predatory lenders far better than current federal law, says the Center for Responsible Lending.
The bill is modeled on a North Carolina law that has reduced predatory loans and would eliminate current loopholes in federal law.
The bill discourages lenders from charging exorbitant fees or prepayment penalties that keep borrowers from refinancing at a lower interest rate or strip wealth from savings; prohibits "flipping"...
February 24, 2005
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Ernst & Young LLP recently released a report discussing the outcomes of binding mandatory arbitration ("BMA") in credit-related, consumer-initiated arbitration cases.1 As an increasingly standard contract provision, consumers often unknowingly or feel compelled to accept pre-dispute BMA clauses in their contracts. These clauses strip consumers of their right to dispute claims in a court with a jury of their peers and provides corporations with substantial advantages to defend against their misdeeds. The Center's evaluation of the Ernst & Young report...
February 18, 2005
WASHINGTON, D.C. -- Borrowers who need protection from triple-digit interest rates when they overdraw their bank accounts won't get it from federal regulators, who are asking financial institutions to police themselves. Now it is up to the Federal Reserve Board to provide at least one important protection to borrowers by requiring banks and other financial institutions to disclose the annual percentage rate on these loans.
The nonprofit, nonpartisan Center for Responsible Lending called on the Fed to require banks to disclose interest rates on these loans and on regulators to replace the...
January 13, 2005
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Borrowers in Higher Minority Areas More Likely to Receive Prepayment Penalties on Subprime Loans (PDF 364kb)
Prepayment Penalties Convey No Interest Rate Benefits on Subprime Mortgages (PDF 351kb)
DURHAM, N.C. -- People with subprime home loans who live in minority neighborhoods face 35 percent greater odds of being saddled with prepayment penalties than borrowers living in predominantly white neighborhoods, according to new research from the Center for Responsible Lending (CRL). Also today, CRL reports findings -- in direct contradiction to subprime mortgage...
September 20, 2004
A broad coalition of civil rights and consumer groups calls on Citigroup to end the abusive practice of requiring borrowers to submit to mandatory arbitration to resolve complaints on home loans in order to make the "best practices" announced by Citigroup today a reality.
The groups calling on Citigroup to eliminate mandatory arbitration in subprime mortgage loans include:
AARPLeadership Conference on Civil RightsNAACPConsumer Federation of AmericaNational Association of Consumer Advocates National Consumer Law Center Consumers UnionUS Public Interest Research GroupNational Fair...
September 14, 2004
Some subprime loans are predatory, and an effective law that eliminates predatory loans will reduce the number of subprime originations accordingly. Showing a different growth rate than two other states without examining loan terms, as the MBA study itself acknowledges, fails to answer the real question of whether the NC law helps homeowners protect their homes from abusive lending while retaining access to credit.
The only study that examines loan terms to determine whether the NC law reduced the frequency of predatory lending was conducted by the University of North Carolina. [1] This...
September 8, 2004
DURHAM, NC -- New research by the Center for Responsible Lending (CRL) finds that predatory mortgage lending is a significant problem in rural America that hinders borrowers from taking advantage of improving credit or interest rate declines.
Perceived as an urban problem by many, certain abusive lending practices are more prevalent in rural areas than in cities. Rural borrowers are 20 percent more likely than their urban counterparts to receive a prepayment penalty that remains effective for five years or more on subprime mortgage loans.
A prepayment penalty is a fee charged by a...
August 26, 2004
The Center for Responsible Lending today commended North Carolina Commissioner of Banks Joseph A. Smith, Jr. and Attorney General Roy Cooper for launching investigations into whether payday lender Advance America is violating the state's usury laws.
The Commissioner of Banks today issued a subpoena for Advance America President William M. Webster, IV or appropriate employees of the company to appear at a public hearing into the matter on October 5. Attorney General Cooper today issued an Investigative Demand to Advance America to turn over documents relating to its payday lending...