Montana Voters Reject Payday Loan Abuses

Montana yesterday became the third state in two years to reject payday loans carrying triple-digit interest rates. Citizens in the state overwhelmingly approved a ballot initiative to limit annual interest rates on small consumer loans to 36 percent. With nearly all precincts counted, 72 percent of voters backed the measure, thus rejecting industry arguments intended to conceal that payday lenders' profits depend on churning— trapping borrowers in a cycle of repeat loans that generate mounting fees and interest charges. Nationally, the average payday borrower takes out nine loans each year

Credit Card Offers Are Needlessly Confusing; New Law Brings Some Improvement

Credit card offers have grown increasingly complicated since 2000, when Congress required issuers to start disclosing pricing information on credit card offers. But instead of providing clarity to consumers about the true cost of their credit cards, issuers responded to this mandate by adding a confusing array of numbers to their offers, new CRL research finds. To see the full report, go to http://www.responsiblelending.org/research-publication/numbers-game-tru… Specifically, CRL's research finds that the total count of numeric disclosures in credit card direct

Do Consumers Really Want High-Cost Bank Overdraft Fees on Debit Cards?

The American Bankers Association and industry consultants claim surveys show customers have "opted in" to high-fee debit card overdraft coverage because they want this service. But these surveys likely only show the success of aggressive, deceptive marketing campaigns to steer customers into bad products, not true customer preference. Industry-sponsored survey results would be more credible if banks and credit unions actually gave customers the information they need to make informed choices. But instead, too many banks and credit unions do the following: Do NOT tell customers they won't be

Joint Letter Urging OCC to Curb Overdraft Abuse

The Honorable John Walsh Acting Comptroller Office of the Comptroller of the Currency 250 E Street, SW Washington, DC 20219-001 Dear Acting Comptroller Walsh: As banks continue their campaigns to persuade consumers to agree to pay steep fees for debit card overdrafts, we urge the Office of Comptroller of the Currency to adopt stricter guidance that effectively requires banks to use fair overdraft practices and fully inform consumers. In the past several months, our organizations filed comments in dockets opened by the Office of Thrift Supervision (OTS) [i] and the FDIC [ii] to update and

Suspend Evictions for Now

USA Today Op-Ed By Julia Gordon, CRL Senior Policy Counsel julia.gordon@responsiblelending.org 202-349-1878 For years, mortgage loan servicing companies have engaged in shoddy business practices, ranging from misapplied payments to evicting homeowners who have never missed a payment. Now employees of these companies have admitted to falsifying thousands upon thousands of affidavits used to toss families out of their homes. The fraudulent documents indicate a problem well beyond the "technical glitches" that the industry describes. If servicers had accurate records, there would be no need to

Civil Rights Groups Renew Call for Immediate Foreclosure Moratorium

National civil rights groups, including the Leadership Conference on Civil and Human Rights, the National Fair Housing Alliance, National Council of La Raza, the NAACP, and the Center for Responsible Lending are renewing their April 2007 call to institute an immediate national moratorium on foreclosures. Until lenders demonstrate that they are adhering to all existing laws, regulations, and contractual guidelines related to loss mitigation and foreclosure legal process, lenders in all 50 states should not move forward with any foreclosures. Across the country, lenders are announcing temporary

Maine Homeowners Bring Class Action Lawsuit Against GMAC Foreclosure Abuses

Five Maine residents filed a complaint today against GMAC Mortgage, LLC (GMAC) on behalf of themselves and a class of Maine homeowners, alleging that the company routinely and systematically files false certifications that it has a right to foreclose on Maine homeowners, and false affidavits when asking courts to enter foreclosure judgments. The homeowners complain that GMAC files these false documents knowing that the courts in Maine will rely on them in deciding whether foreclosures can go forward and in allowing GMAC to sell their homes. Depositions of GMAC employees revealed that they do

MBA REPORT SHOWS 1 IN 7 HOMEOWNERS PAST DUE OR IN FORECLOSURE

One in seven homeowners with a mortgage is past due or in foreclosure, according to the Mortgage Bankers Association's latest report on home loan delinquencies. That's up from one in eight a year ago and one in 11 two years ago. Although there was a dip in the share of homes in foreclosure, the report shows that the foreclosure epidemic continues, with millions of homes still at risk. This data comes on the heels of a report issued this week by the State Foreclosure Prevention Working Group that shows over 60% of seriously delinquent borrowers are not getting any assistance at all from their

Latinos, African Americans more than half of all California foreclosures

Latinos and African Americans in California have experienced significantly higher foreclosure rates than non-Hispanic borrowers in the state, according to first-of-its-kind research released today by the Center for Responsible Lending. As a result, these communities represent more than half of all foreclosures, with 48% of foreclosures on Latinos and 8% on African Americans. These borrowers were more likely to receive higher-cost subprime mortgages with loan terms that typically increased the risk of default, compared with safer loans made to similarly situated non-Hispanic white borrowers

Fed Finalizes Rules Aimed at Mortgage Overcharges (Yield Spread Premiums)

"For years, consumer advocates have been deeply troubled by 'yield-spread premiums (YSPs),' the routine payments to brokers and lenders that essentially function as kickbacks for overcharging on home loans. The Federal Reserve's final rules on YSPs, issued yesterday, mark a welcome milestone that will finally end this practice—saving money for home buyers and making it easier to shop for the best loan. The Dodd/Frank financial reform bill passed last month contains similar protections on yield-spread premiums that go slightly further than the Fed's final rules. As the reform bill is