Seventy-five-year-old Army veteran Lester Rodgers, Jr. lives in Chatham County on a fixed income. When his wife passed away, he worried that he would not have enough money to keep his home. Lester saw a TV ad from Themis Law, PLLC, which claimed to be a national law firm located in Washington, D.C. with expertise in saving peoples’ homes. In reality, Themis is a debt settlement company operated by the founder from his home.
“People are struggling,” said Andrew Kushner, senior policy counsel for the Center for Responsible Lending, an advocacy group. “If you get money this week, that’s less money to pay your expenses next week and you’re even worse off because of the fee.”
Another letter signatory, the Center for Responsible Lending (CRL), called out the GOP-led effort just ahead of the vote Wednesday. "This is yet another political stunt from some members of Congress to prevent tens of millions of borrowers, including low-wealth individuals, service members, public service workers, women, and people of color from receiving relief ahead of the Supreme Court's decision regarding the fate of student debt cancellation, said Jaylon Herbin, CRL's director of federal campaigns.
Rochelle Sparko is a credit repair expert with the Center for Responsible Lending. She reviewed Litigation Practice Group's website and noticed a blog post that provided a general overview of debt relief programs. It said these programs lead to "ceasing of collection activity." "That's just a lie," Sparko said. "I mean, there is nothing that stops debt collection efforts other than a bankruptcy."
Yasmin Farahi, deputy director of state policy at the Center for Responsible Lending, agrees. "A lot of the bills look similar and have been drafted off the same model bill," she said. "It's important that a regulatory regime treats [these services] as loans and there are appropriate consumer protections that go along with other loan products."
The advocacy groups largely support the proposed regulations. But the proposal is still “too loose to sufficiently rein in abusive fintech lending and permits very expensive loans that closely resemble traditional payday loans,” Andrew Kushner, policy counsel at the Center for Responsible Lending, said in a statement.
Using DTI "can unfairly penalize lower-wealth but purchase-ready Black and Latino borrowers, which perpetuates the racial homeownership gap," according to a statement from Mike Calhoun, president of the Center for Responsible Lending. "We look forward to providing input to the agency on a process for setting single-family guarantee fees that will help eliminate barriers that prevent low-wealth borrowers from purchasing a home, while ensuring the housing Enterprises remain appropriately capitalized."
“People are focused on the changes to the fees rather than the resulting fees,” said Michael Calhoun, president of the Center for Responsible Lending, a Durham, North Carolina-based nonprofit research and policy organization. Calhoun noted that borrowers making low down payments face even higher costs, because they’re required to pay for private mortgage insurance if their down payments amount to less than 20% of the value of their home purchase — a fact Republicans have ignored. “They’re tossing things up against the wall and when you dig into it, there’s no there there,” Calhoun said. “In
The fintech industry’s maneuvering could circumvent strong state-level protections for interest on consumer loans. For example, Vermont caps single-loan interest rates at 18 percent. Monica Burks from the Center for Responsible Lending testified before lawmakers over a bill that would carve out EWA products from the 18 percent limit. Referring to EarnIn’s tipping model and expedited service fees, she said, “This is actually strong evidence that their business model depends on loans for which the true cost is often going to be higher than advertised or disclosed, with an APR that would well
Michael Calhoun was named one of the Washingtonian's experts and advocates in banking and finance, outside the government, who are playing big roles in Washington’s policy debates.