“Qualified Residential Mortgage” Rule Would Stunt Market and Shut Out Qualified Buyers

Kenneth W. Edwards, Policy Counsel for the Center for Responsible Lending, presented the following remarks at a press briefing held to discuss the impact of the proposed Qualified Residential Mortgage (QRM) rule on consumers. Other groups participating in the conference were the Mortgage Bankers Association, Consumer Federation of America, the National Community Reinvestment Coalition, and the National Housing Conference. Good morning, I'm Ken Edwards, Policy Counsel at the Center for Responsible Lending, a nonprofit, nonpartisan research and policy organization dedicated to protecting

Calif. Assembly approves dangerous payday lending legislation

Oakland, California Assembly members approved AB 1158 by an 45-14 vote today. The bill, authored by Asm. Charles Calderon (D-Montebello), would raise the payday loan amount limit from $300 to $500. Recent data from the Department of Corporations however, show that the average amount of a payday loan has actually dropped since 2009, indicating that the need for higher loans is simply not there. "This is a dangerous bill for Californians already struggling to make ends meet," said Paul Leonard, director of the California office of the Center for Responsible Lending. "Raising the amount that can

Delinquency and Foreclosure Trends: Housing Market Remains Shaky

The latest National Delinquency Survey issued by the Mortgage Bankers Association for the first quarter shows late mortgage payments and foreclosure starts have been dropping since the end of 2009. However, when you view the bigger picture, the housing market remains shaky, with millions of homeowners still at risk of losing their home. One reason for recent improvements is that foreclosures have been delayed, not stopped, since many lenders have slowed action on delinquencies because of legal problems. As shown in this "Homes at Risk" chart, the longer view of mortgage performance reveals

U.S. House Committee Endorses Predatory Lending; Economic Recovery, Not So Much.

By their votes today to weaken the Consumer Financial Protection Bureau (CFPB), a majority of House Financial Services Committee members showed they care little about American's wallets or our nation's economic rebound. Instead, they voted to stack the rules in favor of the same lenders and regulators who brought us the subprime mortgage crisis and national financial meltdown. Lawmakers could have voted to protect consumers from abusive financial products and practices, but most did not. Instead, they sided with industry-driven moves to hamstring CFPB even before it opens its doors in July

House Subcommittee Vote to Weaken the Consumer Financial Protection Bureau Puts Economic Recovery at Risk

Our nation's economic upheaval is ending slowly, but some lawmakers have forgotten its lessons quickly—witness the vote today to weaken the Consumer Financial Protection Bureau (CFPB) by a U.S. House of Representatives subcommittee. The Financial Crisis Inquiry Commission and other experts place much of the blame for the calamity on federal regulators who failed to protect our banking system and consumers, permitting abusive financial products and practices to dominate the market. Now, even though the CFPB won't be implemented until July 2011, some lawmakers already are trying to severely

State legislators soundly reject bills to combat Calif. foreclosures

This week in Sacramento, the banking committees of both houses considered two bills designed to mitigate the effects of California's foreclosure crisis, and both failed in hearing rooms packed with supporters. Both bills, however, will be re-heard next week. Even in light of tremendous involvement from constituents, consumer advocates, labor and grassroots organizations—and on the heels of robo-signing scandals that have caused thousands of wrongful foreclosures—legislators continue to oppose fair and simple legislation that would help Californians and the economy. "Legislators listened to

Banks Collect Overdraft Opt-ins Through High-Pressure Tactics

Banks use scare tactics and other misleading practices to persuade consumers to opt into high-cost overdraft programs for debit card purchases, a new CRL survey finds. Even so, the survey finds, most consumers choose not to opt in. The survey results contradict claims that consumers overwhelmingly want to sign up to pay nearly $35 on average each time they overdraw their checking account by a small amount with their debit card. See the full report. The survey finds that of the 33 percent of respondents who did opt in: Sixty percent said an important reason they did so was to avoid a fee if

Auto Dealer Financing Hides Higher Costs, Raises Repossession Rates

Consumers who financed a car through a dealership in 2009 will pay more than $25.8 billion in extra interest over the lives of their loans because of dealer interest rate markups, according to new research by the Center for Responsible Lending (CRL). This is an increase of 24 percent from 2007. CRL also found that undisclosed markups increase the odds that a subprime borrower will default by 12 percent and odds that he or she will end up having their car repossessed by 33 percent. The report, "Under the Hood: Auto Loan Interest Rate Hikes Inflate Consumer Costs and Loan Losses," examines the

Joint Housing Group Statement: Proposed Downpayment Rules Harm Creditworthy Borrowers

The following statement was issued by the Center for Responsible Lending, the Community Mortgage Banking Project, the Mortgage Bankers Association, the Mortgage Insurance Companies of America, the National Association of Home Builders and the National Association of Realtors in advance of the April 14 th House Subcommittee on Capital Markets and Government Sponsored Enterprises hearing on the Qualified Residential Mortgage: "In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time

FTC Roundtable on Auto Financing Abuse: Experts on Auto Fraud, Consumer Finance Issues Available

Why: A car is the most common nonfinancial asset Americans own. For most it's a necessity, not a luxury. Too many families suffer at the hands of unscrupulous dealer-financed lending practices: New CRL research shows consumers pay over $20 billion each year in added, nontransparent dealer markups. "Yo-yo" sales and unnecessary service add-ons make car loans needlessly expensive for millions of consumers. What: Experts from the Center for Responsible Lending, the National Consumer Law Center, and the National Association of Consumer Advocates will take part in a roundtable held by the Federal