CRL's Response to the Obama Administration’s Regulatory Reform Plan

"We commend the Administration for its innovative plan for protecting America's families from abusive lending practices, including those that led to the current mortgage crisis, as well as those involving costly overdraft bank fees and other small loans. As our country grapples with the current financial meltdown and its epidemic of foreclosures that have crippled the economy, we must address the regulatory lapses that brought us here. At the same time, we must protect consumers through targeted laws such as the credit card legislation Congress recently passed and the pending legislation that

Consumer Organizations Urge Fast Action to Create Strong, Independent Regulator

National consumer protection organizations applauded President Obama's proposal to create a new federal Consumer Financial Protection Agency to ensure the safety, fairness and sustainability of credit. The agency would have broad powers to ensure that credit and payment products do not have predatory or deceptive features that can harm consumers or lock them into unaffordable loans. "The international economic crisis was triggered by the failure of federal regulators to stop abusive lending, particularly in the housing sector," said Travis Plunkett, Legislative Director of the Consumer

Forced Arbitration Denies Consumers Fair Hearing

Consumers have the deck stacked against them when they are forced into mandatory arbitration by their credit card issuer or other financial services provider, an analysis by the Center for Responsible Lending confirms. Many consumers don't even know that the contracts they sign for most credit cards, auto loans and other small loan products come with hidden clauses that require they use arbitration rather than the courts if a complaint arises. A recent poll shows Americans believe they should have the right to pursue claims in court if they want. The CRL analysis, "Stacked Deck," details some

Congressional Briefing Chronicles Abusive 400% Interest Payday Loans

Religious, civil rights and consumer groups today briefed congressional lawmakers and staff on why all families should be covered by the 36 percent rate cap on consumer loans that already protects military families. Over 70 percent of Americans support a cap of 36 percent or less. "The issue of payday loans is an economic justice issue, and it is a moral issue," said Bishop Minerva Carcaño of the Desert Southwest Annual Conference of the United Methodist Church in Arizona. Arizona and Ohio voters last fall sent a strong message to the payday industry when they used the ballot box to boot

Foreclosure Starts Hit One Million So Far This Year

A dismal milestone was reached over the weekend: One million new foreclosures have been filed so far in 2009, according to estimates by the Center for Responsible Lending. This comes on the heels of a new report from the Mortgage Bankers Association, the first quarter 2009 National Delinquency Survey, showing that 12% of all mortgages are now delinquent—the highest level since the MBA started measuring 37 years ago. "The escalation of foreclosures on all types of loans is alarming," said Michael Calhoun, President of CRL. "It's easy to think, "Well, that's tough luck for the families that lose

President Signs Credit Cardholders’ Bill of Rights

We applaud President Obama and congressional lawmakers on both sides of the aisle for their leadership in swiftly enacting new law to clean up abusive credit card industry practices. The overwhelmingly bipartisan vote in Congress to pass the Credit Cardholders' Bill of Rights was a vote on the side of hardworking American families. Today, with the President's signing the bill into law, the White House and Congress have blown the whistle on practices that for too long have tricked and trapped people into debt. The Credit Cardholders' Bill of Rights arrives just in time. If deceptive credit card

Response to President's memo on Preemption of State Laws

We applaud President Obama for reaffirming the important role of state law in protecting consumers. To that end, we call on federal banking regulators to withdraw their misguided and harmful preemption policy so that state regulators can once again protect their residents from unfair and deceptive financial products. We needn't look further than the current mortgage meltdown for evidence that federal preemption in the financial arena has been unwise and detrimental for tens of millions of American families. The inability of states to enforce their own consumer protection laws ? even as federal

Senate Votes for Real Credit Card Reform

"We commend the leadership of Senator Dodd and Senator Shelby, the Senate Banking Committee and the Senators whose votes ensured passage of H.R. 627, the Credit CARD Act. This bill, which received overwhelming bipartisan support, will provide consumers with significant protections from industry practices that extract billions of dollars in unfair fees and interest from cardholders every year. "We applaud the Committee for crafting safeguards for millions of American families at a time when our country is experiencing the worst downturn since the Great Depression. Consumers are the backbone of

Response to President Obama’s Call for Credit Card Reform

We applaud President Obama for his leadership in pushing for reforms of credit card industry practices that unfairly strip billions of dollars from America's families each year. As organizations representing consumers, civil rights groups, small businesses and labor, we urge swift passage of the Credit CARD Act, a bill championed by Sen. Chris Dodd and Sen. Richard Shelby that enjoys broad, bipartisan support. At today's town hall meeting in New Mexico, the president underscored his belief that strong consumer protections are essential to a sound economy, a lesson we've all learned the hard

Top Credit Card Issuers Appear to Follow Own Rules.

We took a quick sampling of credit card issuers' recent activities to see how they have responded to the Federal Reserve rule changes that were announced in December 2008 but won't take effect until July 2010. We found the top eight issuers, who account for 80 percent of credit card balances, are raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose. The new Fed rule will ban some but not all of these activities. Perhaps most notable is what these issuers—Citigroup, Bank of America, JP Morgan Chase, Capital One, HSBC, Discover