Research & Policy

>>Take Action: Ask your Senators to support S2452 In brief, the Homeownership Preservation and Protection Act sponsored by Senator Christopher Dodd and other leaders in the Senate will achieve these key goals: Establish new protections for all consumers. It will stop brokers from steering prime borrowers into more expensive subprime loans, create a duty for mortgage brokers to consider the...

Read the Executive Summary 36% Cap Springs the Trap Measures short of an interest rate cap fail to fix payday lending problem The debt trap of payday lending persists even in states that have put restrictions on payday loans while exempting them from interest rate caps. In "Springing the Debt Trap," CRL finds that high numbers of borrowers are still...

Payday loans carry an annual interest rate of 391 percent and are so difficult to pay off that many borrowers end up paying more in interest than they originally borrowed, as documented in our report entitled, Financial Quicksand. Payday lenders renew their loans to the same borrowers many times per year, either by rolling them over for another term, or...

A working paper by a staffer at the Fed Bank of NY is fundamentally flawed, offers no valid information, and is being used to justify policy that keeps low-wealth borrowers trapped in income-draining payday loans. The paper is not a Federal Reserve Bank report as a payday industry press release implies. Our critique exposes the fatal errors in the paper's...

Committee: House Committee on Financial Services

Committee: U.S. Senate Judiciary Committee

The North Carolina Commissioner of Banks found that low- and middle-income families in North Carolina have not been negatively impacted by the absence of payday loan shops that once dotted the state's street corners and strips malls; in fact, many are not aware that they have left. Nine of ten survey respondents think payday lending is a "bad thing," and...

In our December 2006 study, " Losing Ground," CRL predicted that millions of American households would lose their homes to foreclosures in the subprime mortgage market. "Losing Ground" focused on the direct impact of subprime foreclosures, but it did not attempt to quantify how those foreclosures would affect neighboring homes and larger communities. In other words, it did not address...

Recent industry projections are that over eight million families will lose their homes to foreclosure over the next four years. That's one in every six homeowners with a mortgage. If the economy enters a deep recession, the number of homes lost could exceed 10 million. With the housing sector responsible for one in eight U.S. jobs, the flood of new...

Committee: U.S. House Judiciary Committee Subcommittee on Commercial and Administrative Law

Congressman Miller, Congressman Watt, and Chairman Frank introduced the "Mortgage Reform and Anti-Predatory Lending Act of 2007" on October 22, 2007. The proposed legislation addresses many abusive lending practices that contributed to today's foreclosure crisis, including reckless underwriting practices, subprime prepayment penalties, and yield-spread premiums. However, it is critical that the details of remedy and enforcement provisions are strengthened in...

Committee: U.S. House Committee on Financial Services

On August 31, President Bush announced a White House initiative to help homeowners facing foreclosure. In his press conference, the President said, "I strongly urge lenders to work with homeowners to adjust their mortgages. I believe lenders have a responsibility to help these good people to renegotiate so they can stay in their home." Regulators have urged the same actions...

Committee: U.S. House Judiciary Committee Subcommittee on Commercial and Administrative Law

As two trends collide—increasing use of debit cards among young adults and increasing use of abusive overdraft practices among major banks—college students and young workers just starting their adult lives are paying a high price. At least one hundred universities are contributing to this problem by selecting a single bank and granting them exclusive marketing privileges on campus. Such an...