Would Proposed Federal Law Give High-Interest Lenders a ‘Free Pass’?

Karla Bowsher | Money Talks News
As also noted by House Republicans, the CFPB has used that jurisdiction to propose a federal regulation on payday, vehicle title and certain other high-cost installment loans. But the sentence on page 403 of the Financial Choice Act could change that. As Diane Standaert, director of state policy for the nonprofit Center for Responsible Lending, tellsConsumerist, "It's a shocking provision. Payday lenders charge triple-digit interest rates, and Congress is proposing to give them a free pass.”

Buried Deep Within GOP Bill: A 'Free Pass' For Payday and Car-title Lenders

David Lazarus | The Los Angeles Times
With that one line, Republican lawmakers have declared their willingness to allow people facing financial difficulties to be at the mercy of predatory lending practices that typically involve annual interest rates approaching 400%. "They’re trying to sneak in that provision,” Diane Standaert, executive vice president of the Center for Responsible Lending, told me. “It seems like they hoped no one would notice.”

What to Do When You’re Upside-Down on a Car Loan

Nicole Arata | NerdWallet
If you decide to trade in your car, be aware that this doesn’t eliminate negative equity — it rolls it into the monthly payment on your new loan. This means you could end up taking on even more debt. “What’s more likely is you’re going to end up just constantly rolling over negative equity,” says Chris Kukla, executive vice president of the Center for Responsible Lending.

Better Fintech Alternatives to High-Cost Credit are Already Here

Todd H. Baker | American Banker
The financial services industry has responded by creating STSDC products that provide quick and easy liquidity injections for cash-strapped borrowers. These products have become a de facto liquidity support system for families dealing with the consequences of income disparity and volatility. While STSDC products satisfy urgent short-term needs, they carry a high price. The severe negative individual, social and economic impacts of this type of high-cost liquidity support have been very well-documented over the years by the Pew Charitable Trusts, the Center for Financial Services Innovation

In Inclusion Move, SoFi Opens Up to Customers Ignored by Wealth Managers

Suman Bhattacharyya | Tearsheet
For analysts focused on financial inclusion, the SoFi Wealth product may be a step in the right direction, but a long way from giving underserved populations a needed leg up. "Even $500 is hard for low-income customers, these people are borrowing $200 to make ends meet — but it’s better than a $10,000 [minimum]” said Ashley Harrington, counsel at the Center for Responsible Lending. What’s more likely, Harrington added, is that the availability of the product could benefit borrowers of color who have access to more capital.

The Bar For Credit, Not Consumer Protection, Needs To Be Lowered

Will McDermott | Scotsman Guide
Our primary concerns are ensuring that the system provides for access and affordability for all creditworthy borrowers. Right now creditworthy borrowers are being locked out of the system and being underserved. When we look at recent HMDA [Home Mortgage Disclosure Act] data — specifically the 2015 data — we are concerned to see low levels of conventional lending to borrowers of color and to lower-wealth families overall. We think that conventional lenders have responded to the mortgage market with market overcorrections that are pushing creditworthy borrowers outside of their ability to access

Milestone: 15 Years of Fighting Predatory Lending

Self-Help Credit Union
In the late 1990s, leaders at Self-Help Credit Union began to notice a disturbing trend. While Self-Help was helping lower-wealth families buy their first homes, predatory lenders were busy targeting the same families for subprime refinances. Too often these refinances drained the homeowners’ resources until they lost their homes. When a borrower came to us owing more than $47,000 on a house that originally cost $29,000, we knew we had to act.

Robert Pittenger is Wrong: The CFPB Helps the Economy

Chris Kukla | Special to the Charlotte Observer
One clear lesson from the financial crisis is that common-sense rules of the road in our financial markets would have prevented the damage. It may seem amazing now that banking regulators would have to pass rules requiring lenders to make sure borrowers could actually repay mortgage loans, but that was the case only seven years ago.