Research & Policy

"Yeah, people got bad mortgages. But others were able to finally buy a home" begins a recent article in a national magazine, repeating the common assumption that subprime mortgage lending has helped increase the overall level of homeownership. But a new CRL analysis shows that while the subprime market has produced more than $2 trillion in home loans over the...

Committe: U.S. House Committee on Oversight and Government Reform

Committe: U.S. House Committee on Oversight and Government Reform

Banks stand back as debits and ATM withdrawals cause high-cost overdrafts for their customers Rather than linking their customers' checking accounts to their savings or other resources to cover overdrafts, many banks and credit unions are automatically covering their customers' shortfalls with expensive short-term loans. More overdrafts are happening when customers swipe their debit card or make an ATM withdrawal...

In a recent working paper, Donald Morgan, a researcher from the Federal Reserve Bank of New York, attempts to determine whether payday lending is predatory by comparing the welfare of households in states where payday lending is unlimited versus states where payday lending is illegal. After a comparative analysis, Morgan concludes that "unlimited" payday lending enhances welfare. However, Morgan's findings...

A CRL study released in December 2006, revealed that millions of American households would lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. The "Losing Ground" study was the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006. CRL found that despite low...

Executive Summary: Financial Quicksand New CRL study finds borrowers pay $4.2 billion every year in excessive payday lending fees Every year, payday lenders strip $4.2 billion in excessive fees from Americans who think they're getting a two-week loan and end up trapped in debt. This report finds that across the nation payday borrowers are paying more in interest, at annual...

Committe: Senate Subcommittees on Housing & Transportation and Economic Policy

In a working paper released last month, Morgan Rose, a researcher from the OCC, analyzes a set of subprime loans originated in Chicago to determine the impact of selected lending terms on the likelihood of foreclosure. The study finds that loans with prepayment penalties and balloon payments are 22 to 117 percent more likely to foreclose than those without such...

A Georgia statute passed in May 2004 imposes stiff penalties for payday lending by non-banks and in-state banks, and is the first state law to expressly prohibit payday lenders from contriving with out-of-state banks to evade state usury limits. Soon after its enactment, several payday lenders and their bank "partners" sued the state seeking a court ruling that the Act...

Committe: House Subcommittee on Financial Institutions and Consumer Credit

African-Americansand Latinos get high-priced subprimemortgages far more frequently than whites -- even when they are equally qualified, according to a groundbreaking new study from CRL. Lenders say they charge more because African-Americans and Latinos on average have shakier credit histories, which makes lending to them riskier. But that explanation is simply wrong. In the most extensive study of its kind...

VULNERABLE CONSUMERS CAUGHT IN OVERDRAFT CYCLE CRL has conducted a survey of overdraft loan customers. Our findings suggest that: * Sixteen percent of overdraft loan users account for 71 percent of fee-based overdraft loan fees. *Repeat users are more often low-income, single, non-white renters. * Repeat users are in effect using the overdraft loans as an expensive substitute for a...