Tell the Fed “No” to “Gotcha” Bank Fees

No one likes overdraft fees: Who wants to pay $34 for a $5 hamburger? The public has until a March 30 deadline to tell banking regulators at the Federal Reserve Board whether a) banks should be required to let customers "opt in" to these high-cost lending programs or b) be allowed to continue automatically signing them up? Only the first of the Federal Reserve's proposed rules—the opt-in option---would be a real step toward reforming overdraft practices. That's because it would require banks to get a customer's permission before enrolling him or her in a costly overdraft program for ATM and

A New Foreclosure Every 13 Seconds

The foreclosure epidemic that ignited today's economic crisis continues unabated, as illustrated by new up-to-the-second figures released by the Center for Responsible Lending. CRL's website,… , now displays a constantly updated counter showing new foreclosure starts this year for the nation and also by state. The counter is based on data collected by the Mortgage Bankers Association and adjusted to cover the entire market. It graphically depicts the magnitude of home losses as they mount each

OTS: The Second S&L Scandal

The federal Office of Thrift Supervision (OTS) has failed in its responsibility to oversee the nation's thrift institutions and protect the public from reckless lending practices, according to a new report released today by the Center for Responsible Lending. Read The Second S&L Scandal: How OTS allowed reckless and unfair lending to fleece homeowners and cripple the nation's savings and loan industry, CRL recommends that OTS be eliminated as a government agency and that its functions be folded into other federal banking

New Research: Fallout from Reckless Lending Continues

The subprime market for home loans has dried up for now, but the bad subprime loans made at the height of the mortgage bubble continue to damage neighborhoods and drown the economy in foreclosures. New information in a Center for Responsible Lending report provides a fresh, grim snapshot of the spreading negative effects of subprime mortgages that were aggressively marketed up until last year. The report, " Continued Decay and Shaky Repairs: The State of Subprime Loans Today," includes these findings: Over 1.5 million homes have been lost through subprime foreclosures. Another 2 million

Joint Statement: Jury's out on overdraft proposals

Federal banking regulators yesterday withdrew proposed rules that would have largely failed to protect consumers from astronomically high-cost, unsolicited overdraft loans. The Fed then immediately issued a new proposal containing two alternative approaches. The impact the new proposal will have on abusive fees depends primarily on which approach the Fed ultimately chooses. Consumers pay $17.5 billion per year in overdraft fees that banks charge after routinely allowing consumers to overdraw their accounts by checks, ACH transactions, ATM withdrawals and debit card purchases. This exceeds the

CRL Statement: Repeat Failures Reveal Faulty Modifications

"Today in Washington, several groups issued updates on mortgage performance and the success of attempts to repair distressed home loans. These reports show we are still losing the battle to stop the continuing epidemic of foreclosures at the root of the growing economic crisis. The proverbial vicious cycle continues as these foreclosures, in turn, continue to batter our economy and put a recovery further out of reach. "The weak economy is, of course, a factor, in the default of modified loans. But the underlying cause of both the worsening economy and the growing number of re-defaults is that

Fed Credit Card Rules Good; Overdraft Proposal Needs Work

Federal regulators issued credit card rules today that take a significant and welcome step to curb some of the industry's most unfair and abusive practices. Unfortunately, implementation of the rules won't take effect for 18 months and, in several key respects, don't go far enough to protect consumers. "Protecting consumers from the costly credit card practices that drain their wallets should always be a priority," said Center for Responsible Lending president Michael Calhoun. "But with a faltering economy showing no sign of improvement, consumers need to be able to hold on to hard-earned

New Research Sheds Light into the Dark Corner of Credit Card Pricing

Credit card companies make credit more costly than necessary by manipulating payments to keep the highest-cost balances from being paid off and by imposing hidden, hard-to-understand penalty interest rates, two new studies released today by Center for Responsible Lending show. The reports, entitled "Priceless or Just Expensive? The Use of Penalty Rates in the Credit Card Industry" and "What's Draining Your Wallet? The Real Cost of Credit Card Cash Advances", detail widespread practices that deceive and abuse consumers. These include the use of penalty repricing--raising a cardholder's APR for

MBA Report Shows Crisis Deepens

Today we learn from the Mortgage Bankers Association (MBA) that at least one out of every 10 homeowners is behind on their mortgage or already facing foreclosure, a fact that underscores what we already know is the gloomiest housing picture in the United States in decades, possibly ever. The MBA's newest numbers for the three months ending September 30 also underscore what we and others, including many economists with expertise in housing issues, have been saying for over a year: Avoiding foreclosures that don't need to happen is our country's best hope for economic recovery. The reason

California Foreclosures Continue

OAKLAND—Dec. 5, 2008—Nearly 11 percent of all mortgage loans in California were past due or in foreclosure at the end of September according to new data released this morning from the Mortgage Bankers Association (MBA). The data, which show that nationally one in 10 homes were delinquent; 1 in 20 were seriously delinquent and 1 in 33 were in foreclosure as of Sept. 30, underscore the need for swift and effective solutions to mitigate the foreclosures that are at the root of the worst economic crisis in decades and the personal financial crises of millions of homeowners and their neighbors.