Fintech’s Latest Scheme

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Jaron Facundo | The American Prospect
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

The problem with Apple’s big banking push

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Sara Morrison | Vox
“Currently, there are no requirements for underwriting for buy now, pay later,” Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, said. “So there’s no analysis required — although some companies do — about whether this person has the ability to repay this loan.” According to the Consumer Financial Protection Bureau, BNPL services approved 73 percent of applicants in 2021, and 10.5 percent of people who took out those loans paid a late fee. Chabrier said BNPL users tend to be younger, to have worse credit, and to be people of color. They’re also more likely to

How to Get Out of a Payday Loan Nightmare

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Jackie Veling | NerdWallet
"Even when people feel like they're making progress, they're not actually paying down their loans," says Yasmin Farahi, deputy director of state policy and senior policy counsel at the Center for Responsible Lending in Durham, North Carolina. "That's how the cycle continues. They're paying some amount, but it's not enough to get them out from under this."

Lower mortgage fee will help some buyers with Fannie and Freddie loans

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Samantha Fields | Marketplace
This change is designed to save lower-income buyers money, according to Mitria Spotser at the Center for Responsible Lending — often a few thousand dollars’ worth, which is enough to make the difference for some people. “It expands access by making homeownership more accessible to a broader scope of folks,” she said.

Center for Responsible Lending Warns CUs, Public of Threat to CFPB

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Jim DuPlessis | Credit Union Times
A bill being marked up by the House Wednesday is called the “CFPB Transparency and Accountability Reform Act,” but it reminds the head of the Center for Responsible Lending of the attempt in 2017 to shut down the bureau. The CFPB was created in 2010 to enforce provisions of the Dodd-Frank Act, which Congress passed to prevent abuses that contributed to the financial meltdown in 2007 that led to the Great Recession.

Morning Money: In Defense of CDFI Changes

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Zachary Warmbrodt | Politico Morning Money
In defense of CDFI changes — The Center for Responsible Lending pushed back on last week’s MM item about Arkansas Republicans who said rural lenders would be hurt by Treasury’s planned rule revamp for Community Development Financial Institutions. CRL policy counsel Andrew Kushner said: “Treasury’s plan for certification of Community Development Financial Institutions merits strong support. The plan appropriately prevents CDFI designation from going to bad actors that engage in predatory financial practices like lending above 36 percent APR or issuing unaffordable mortgages like those that

$322 billion bank failures become a different ‘March Madness’

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Charlene Crowell | Chicago Crusader
In 2023, “March Madness” took on a new meaning. Traditionally known as the nation’s premier college basketball competition, this year that moniker could also describe the madness that sprang from the closure of two banks with combined assets of $322 billion that affected consumers and small businesses in over 15 states.

Anxious about your student loan debt? Beware of offers that are too good to be true

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Carlos De Loera | Los Angeles Times
Sometimes consolidating your loans through a private lender can be advantageous in the immediate term but will have detrimental effects in the long term, said Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, a nonprofit focused on consumer financial protection. The pitch might begin with, “Hey, we can get you low payments right now,” Herbin said. “That may be true, but on the back end, you have to look at what is the interest rate that is coming along with that. If you miss a payment and you get put into default, how long will it take you to get out of