CRL in the News

In this episode of the Consumer Finance Monitor Podcast, we examine one of the most closely watched and increasingly controversial developments in consumer finance: earned wage access (EWA) products. EWA products allow workers to access a portion of wages they have already earned before their scheduled payday. Proponents describe these products as a valuable financial tool that helps consumers manage...

For some states where legislation has been enacted, Monica Burks, policy counsel at the Center for Responsible Lending, anticipates more clarity to promote consumer protections. Maryland Governor Wes Moore, for example, has asked for certain provisions in the state's legislation to be strengthened to protect consumers and "prevent misuse or inappropriate lending practices," according to a letter sent by Moore...

Nevertheless, consumer groups lamented the retreat of the CFPB from fintech enforcement actions. “It’s certainly a loss for consumers, and it’s a huge loss for advocates. … Having a federal voice hold people accountable for bad practices disincentivizes those bad practices,” says Monica Burks, policy counsel at the Center for Responsible Lending (CRL). “We are going to have a much...

In 2024, nearly a quarter of buy now, pay later customers made a late payment, according to the Federal Reserve, a notable jump from 18% the prior year. Late payments can carry fees disproportionate to original sales prices, says Nadine Chabrier, senior policy counsel at the Durham-based Center for Responsible Lending, part of Self-Help Credit Union. “I don’t consider (it)...

“BNPL lenders are not currently required to […] determine whether consumers can afford their BNPL loans,” said Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending. “There are currently no checks and balances on borrowers taking out multiple BNPL loans at the same time, which may lead to overextension.”

An act of Congress would not be needed to amend the 30-year amortization limits for qualifying mortgages (QMs) that adhere to the underwriting guidelines of Fannie Mae and Freddie Mac, says Mike Calhoun, president of mortgage lending at the Center for Responsible Lending, the policy arm of Self-Help Credit Union. “The statute gives all the relevant agencies the right to...

Andrew Kushner, senior policy counsel at the Center for Responsible Lending, which applauded the decision by judges on the 10th Circuit Court of Appeals, said: "I think you will see other states take an interest in this and go down the same path that Colorado has.

“Debt settlement is specifically aimed at encouraging people to not pay their debts in hope that the company can reduce the debt load,” said Ellen Harnick with the nonprofit, nonpartisan Center for Responsible Lending. “The problem is that hope is very often not realized and certainly not realized for all of the debts the person has now just defaulted on.”...

Earned-wage access companies are confronting suits in federal courts in Maryland, California, and Georgia, and state court in Illinois, according to a Bloomberg Law review. The litigation is a natural byproduct of the products’ growth, said Monica Burks, policy counsel at the Center for Responsible Lending. “The aggregate effects of this predatory product are starting to show themselves,” she said.

Nonetheless, consumer advocates are alarmed by the burgeoning industry’s practices, and the lack of government oversight. Organizations such as the National Consumer Law Center and the Center for Responsible Lending consider EWA providers to be a new form of payday lending that charges excessive fees and traps low-income workers in a cycle of debt.