Shredded Security: Overdraft practices hurt older Americans

Thank you for being with us today. I want to thank my co-author on this report, Peter Smith, who is also a researcher at the Center for Responsible Lending Our nation is in a crisis of debt that reaches beyond the foreclosure epidemic and deep into the pockets of Americans who are living paycheck-to-paycheck. Banks and Credit Unions compound this problem through a problematic practice that strips billions in fees for a so-called service that their customers don't ask for and typically don't want. Today, consumers are typically enrolled automatically into their bank's most expensive overdraft

Goldstein Statement: Response to release of MBA June data

New reports from lenders show that families falling behind on their mortgage payments, as well as those facing imminent foreclosure, have reached record highs. The trend indicates the mortgage crisis continues to worsen and is overwhelming the industry's voluntary efforts to help borrowers renegotiate unaffordable home loans. The market has shown that it cannot fix itself. Federal and state policymakers need to do more to hold lenders accountable and stem the foreclosure crisis that is damaging our economy. According to the Mortgage Bankers Association's National Delinquency Survey, released

Trap is sprung in the Buckeye State

One third of the nation's population will soon be free of a practice that has stripped billions per year from the paychecks of low-wealth Americans over the past two decades, as Governor Ted Strickland signs a law today capping interest rates at 28 percent in Ohio. Enforcement of a two-digit rate will save citizens $1.74 billion per year in fifteen states plus the District of Columbia, where 33 percent of the US population lives. Just a year ago, only about 20 percent of citizens lived in payday lending-free zones. In a faltering economy marked by debt saturation, payday lending threatens to

Ohio stamps out predatory payday lending

Bringing an end to the practice of trapping borrowers in 400 percent payday loans, the governor of Ohio promises to sign a 28 percent interest rate cap finalized by the Ohio House today, a reform that passed the State Senate last week and had already passed the Ohio House. The measure had strong bipartisan support, including sponsorship and support by Republican leadership. A fierce coalition of consumer, religious and business groups kept the fire burning in the media and the pressure on lawmakers to do the right thing throughout the hard-fought battle. Ohio's citizens will save $210 million

Regulators’ Overdraft Proposal Falls Short

New rules on overdraft practices proposed by federal banking regulators represent a significant acknowledgment that something is wrong with the banking system in the U.S., consumer groups said. Unfortunately, the proposed rules will largely fail to protect the billions of dollars in funds stripped from American bank accounts through excessive overdraft fees every year. Representatives from the Consumer Federation of America, Center for Responsible Lending, Consumers Union, U.S. PIRG, and the National Consumer Law Center are disappointed with new proposals issued by the Office of Thrift

Banking Regulators Target Credit Card Abuses

Rules Take Positive First Step to Rein in Unjust Interest Rate Hikes and Billing Practices; Groups Call on Congress to Provide Additional Consumer Protections Representatives of national consumer organizations today applauded federal banking regulators for proposing initial rules to curb some abusive credit card lending practices. The groups also called on Congress to provide additional consumer protections not proposed by the regulators. The proposal was offered today by the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration. Among other

CRL Response to April 10th HOPE NOW Release

In its April 10, 2008 press release, HOPE NOW claimed that the program, by facilitating voluntary workouts by servicers, has enabled 1.2 million homeowners to stay in their homes. The release touts this statistic, as well as the high proportion of subprime loan workouts comprised by loan modifications, as evidence of the industry's commitment and ability to prevent foreclosures. However, a closer look at the HOPE NOW data reveals that, notwithstanding efforts by servicers, the current crisis in the housing market simply dwarfs the mortgage industry's response to it. [1] • The number of

Eliminate brokers' incentive to put borrowers in more costly loans

Good morning. This is Ted Lieu, and I represent parts of Los Angeles County, including Torrance, Redondo Beach, Marina del Rey and West Los Angeles, in the California Assembly. I want to thank the Center for Responsible Lending for inviting me to take part in the release of this critical research on broker pricing patterns. As many of you know, California is the epicenter of the foreclosure crisis. Last year, the Center of Responsible Lending estimated that nearly 500,000 California families would lose their homes to foreclosure due to the reckless lending practices that are so common in the

Subprime Borrowers Needlessly Overpaid for Brokered Mortgages

Same borrower qualifications, same loan, but very different prices >> Read the report New research by the Center for Responsible Lending shows that subprime borrowers with brokered loans pay significantly more than their counterparts who deal directly with lenders. In the first four years of a mortgage, a typical subprime borrower who has gone through a broker pays $5,222 more than if he or she obtains the loan directly from a lender. "These findings confirm that mortgage brokers steer many of the most vulnerable borrowers to higher-priced loans than they deserve," said CRL president Michael