Bank Regulators Should Withdraw Consent Orders on Illegal Servicing

National consumer, civil rights, and labor groups ask bank regulators to withdraw the proposed consent orders issued to the nation's mortgage servicers and to work with the state Attorneys General and United States Department of Justice to obtain a joint settlement that addresses illegal servicing practices in a meaningful manner. The draft consent orders that have been released to the press do not hold servicers accountable for illegal practices and do not stop avoidable foreclosures. Read the letter. For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org

End Debit Card Dysfunction

A positive move by one of the nation's biggest banks this week highlights the extent of overdraft abuse within the financial system and should encourage bank regulators to undertake further reform. In response to consumer feedback, Citibank announced it will begin clearing checks from lowest to highest to minimize overdraft fees. That will be a departure from clearing check transactions in high-to-low order, a common banking practice that creates more overdraft fees by emptying the account faster. This decision makes Citibank unusually active among our nation's largest banks in voluntarily

End Debit Card Dysfunction

We renew our call for bank regulators to do their job by protecting consumers from abusive debit card overdraft practices. Bankers' whining about minor reforms should not slow the progress of prudent banking policy. As the subprime mortgage fiasco shows, bad policy allows bad practices that hurt not only borrowers, but investors, taxpayers and the banks themselves. The FDIC has taken an important step by requiring, among other things, that banks inform their frequently overdrawn customers of cheaper overdraft alternatives. Its new guidance warns FDIC-supervised banks against allowing overdraft

With New Fed Rules, Mortgages More Likely to Have a Fair Price

Today marks the end of a long and notorious era in lending history, as new Federal Reserve rules take effect to stop mortgage kickbacks. For years, mortgage brokers and loan officers could charge different borrowers different prices for mortgages, even when borrowers had the same qualifications. By steering some customers into unnecessarily riskier and more expensive loans, mortgage brokers often pocketed thousands of dollars in extra pay. CRL research confirms that borrowers typically have paid more for brokered loans, especially on subprime mortgages. Almost 75% of all subprime mortgages

New CRL Research: Payday loans are gateway to long-term debt

Although payday loans are marketed as quick solutions to occasional financial shortfalls, new research from the Center for Responsible Lending shows that these small dollar loans are far from short-term. Payday Loans, Inc., the latest in a series of CRL payday lending research reports, found that payday loan borrowers are indebted for more than half of the year on average, even though each individual payday loan typically must be repaid within two weeks. CRL's research also shows that people who continue to take out payday loans over a two-year period tend to increase the frequency and extent

Banks' Foreclosure Bias Hurts Investors

New research by the Center for Responsible Lending finds that banks and other loan servicers often foreclose when investors have more to gain from a loan modification. The study—" Fix or Evict? Loan Modifications Return More Value than Foreclosures"—also finds that the industry's poor track record on loan modifications can't be blamed on homeowners who re-default. The research involved running more than 1,500 simulations of the test used by loan servicers to determine whether to modify distressed mortgages or foreclose. CRL found that even with hypothetical re-default rates as high as 79%—much

REALTORS®, homebuilders Agree: Arbitrarily high down payments will hurt economy

REALTORS ® , Homebuilders, consumer groups urge federal regulators to avoid arbitrarily high mortgage down payments, which would hurt the economy by unfairly and unnecessarily closing the door to home ownership for many middle-class families. http://qa.crl.w.lmdagency.net/research-publication/joint-letter-regulat… For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org; or Charlene Crowell at (919) 313-8523 or charlene.crowell@responsiblelending.org.

Debit Card Overdraft Abuse Continues

Some of the biggest banks in the nation still collect excessive fees from American families by encouraging overdrafts and manipulating their customers' accounts. Recent comments in the media suggesting that Americans overwhelmingly choose this costly product are suspect, in part because they overlook millions of customers at banks that do not offer the costly option for debit card transactions. These reports also ignore the impact of heavy-handed and deceptive marketing by banks who have sold costly overdraft "protection" as a beneficial program. Bank of America and Citibank, the #1 and #4

AGs Highlight Illegal and Negligent Mortgage Servicing

Responding to widespread evidence of improper accounting, unwarranted fees, false documentation, and arbitrary foreclosure decisions, the 50 state Attorneys General are crafting a long-overdue plan to hold the mortgage servicing industry accountable. The plan would address accusations that banks and servicers have engaged in illegal and negligent servicing practices that have been a continued drag on the U.S. housing market and economy. "When unnecessary foreclosures flood the market, taxpayers end up picking up the tab," said Mike Calhoun, president of CRL. "Loan servicers have repeatedly

Sen. Ellen Corbett introduces CA debt settlement bill

Oakland, Calif.--Californians struggling to overcome heavy debt will have greater protections and greater success if a bill by State Sen. Majority Leader Ellen Corbett (D-San Leandro) becomes law. Debt settlement companies advertise prominently on radio and television that they will reduce debts for pennies on the dollar, aiming to attract consumers dealing with overwhelming debt loads. Yet they typically collect large sums of their clients' money up-front, have a track record of settling very little debt, and often leave clients worse off than they were before. "Many Californians are