Research & Policy

The Consumer Financial Protection Bureau (CFPB) has proposed a new national rule that addresses payday and car title lending. The proposal, as written, has some useful elements, but it is seriously undermined by several major loopholes. If the loopholes aren’t closed in the final version, the rule could essentially permit payday predators to conduct business as usual. What We Can...

A recent blog post by Liberty Street Economics, Reframing the Debate about Payday Lending, mischaracterizes the debate around payday lending and downplays the harms done to vulnerable consumers. Payday lenders and their allies have referenced the blog to justify their ongoing efforts to delay and weaken much needed regulation at both the state and federal level. The Center for Responsible...

The proposed rule takes the right general approach by establishing an ability-to-repay principle – including consideration of income and expenses – at its core. This is extremely significant; while a long-standing tenet of responsible lending, it is one ignored by these abusive industries driven by unaffordable loans. It is a particularly important standard for high-cost loans where lenders have the...

The following blog post by Mike Calhoun and Sarah Wolff originally appeared on the Urban Institute’s Housing Policy Center: http://urbn.is/29rYamw Any housing finance system’s ability to provide broad access and affordability is predicated on two factors: how prices are set and, equally importantly, how costs are distributed. Price is important to focus on for many reasons; chief among them is...

A better enforced and strengthened CRA would be a critical tool in ensuring that underserved communities across the country are provided with the credit opportunities needed to better recover from the 2008 financial crisis. While more affluent neighborhoods have bounced back or have begun to bounce back following the crisis, many low- and moderate-income neighborhoods continue to struggle eight years...

An analysis of recently available data confirms that financial institutions continue to engage in abusive overdraft practices and that reform is urgently needed. This issue brief highlights five key concerns: Overdraft fees remain an enormous drain on checking account customers. Using newly available call report data as the starting point, we estimate that consumers pay nearly $14 billion annually in...

The Consumer Financial Protection Bureau (CFPB) is widely expected to soon propose a new national rule that addresses payday and car title lending. If strong enough, the rule has the potential to rein in the worst abuses of these kinds of high-cost loans, which carry triple-digit interest rates. Payday lenders are pushing for loopholes in the rule that would make...

The topic of student loan debt is increasingly gaining public attention. Too often, assumptions about debt are made that hide the real contours of the problem. For example, simply citing aggregated student loan debt loads at a state or national level suggests that every student loan borrower is the same– with identical financial backgrounds, borrowing to attend similar institutions, and...

This memo summarizes the findings from a statewide poll of 501 likely 2016 general election voters in Colorado. Only those registered voters who had participated in a past general election were invited to participate, as well as any new registrants since the November 2012 election. View the polling questions and topline results. (PDF)

This letter signed by CRL along with 163 other organizations urges the CFPB to use its Congressional authority to restrict forced arbitration. Lenders and other financial services companies use forced arbitration to push consumers out of court and into a private arbitration system that they tilt to favor large financial interests. The CFPB’s empirical findings in its comprehensive and evidence-based...

This letter commends Representative Wasserman Schultz for cosponsoring the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act of 2016 and urges her to withdraw support from H.R. 4018. That bill would export the problematic "Florida model" of payday lending laws to the rest of the country. Florida's payday laws are riddled with loopholes: the average borrower is saddled with...

This letter urges the Bureau to establish a strong rule addressing payday, car title, and similar loans. It focuses on the migration of payday and car title lenders to long-term loans that keep borrowers trapped in prolonged unaffordable debt. This migration is already well underway in the states where long-term, high-rate loans are permitted, and lenders are already aggressively seeking...

This letter urges the opposition of HR 1261 or any similar bills that undermine the independence of the Consumer Financial Protection Bureau (CFPB) by subjecting it to the appropriations process. It is less than five years since the CFPB was established. Since then, it has fulfilled Congress's vision of a federal agency with "the authority and accountability to ensure that...

In a Statement for the Record to the Hearing of the Senate Committee on Banking, Housing, and Urban Affairs: Assessing the Effects of Consumer Finance Regulations, CRL expresses its support for post-crisis lending rules that have made the financial system safer by eliminating abusive financial products, reining in reckless behavior, and encouraging more effective oversight.

Debt buyers, specialized debt-collection companies, purchase defaulted consumer debt from creditors such as credit card companies for pennies on the dollar. Debt buyers then attempt to collect the debt, often by suing borrowers in court. Unfortunately, because debts are typically sold to debt buyers without fully verifying the accuracy of the borrower's identity, amount of the debt, or status of...

New CRL research confirms that over the past decade, a Florida law that was enacted to protect Florida consumers from the predatory harms of payday lending has done the exact opposite. Instead, since 2005 payday loan borrowers in the Sunshine State have spent over $2.5 billion in payday loan fees. Further, Florida's senior citizens and consumers of color are the...

View a letter from North Carolina organizations to Director Richard Cordray of the Consumer Financial Protection Bureau calling for a strong payday rule. North Carolina has a unique story to tell about payday lending. North Carolina was the first state to: Roll back a once legal payday industry Litigate the rent-a-bank model Force a bank to drop its bank payday...

This joint letter expresses concern that an important opportunity to help improve language access for people who are not fluent in English is being lost. Allowing mortgage applicants to choose in which language they are most comfortable in communicating addresses a major problem of lenders and servicers working with limited English proficiency populations and collecting this information through the URLA...

CRL applauds FHFA for its recognition of the importance of the Duty to Serve mandate in the Housing and Economic Recovery Act of 2008 (HERA) and for putting forth a strong proposed rule. We strongly support much of what FHFA is proposing. The comments in this letter address numerous questions on which FHFA requests input, including general process, evaluation, and...

In a new report, the Center for Responsible Lending – along with Americans for Financial Reform – examines the impact of advocacy efforts of policy and regulation. The report take stock of both gains (actions that support or defend consumer protections) and losses (actions that jeopardize or reduce consumer protections) – specifically in the following areas: Federal legislation State legislation...

Cars are the most common nonfinancial asset held by American families, and for some families, their most significant asset. Cars have become a necessity for U.S households, with more than 85% of the U.S. workforce using an automobile to commute to work. Car ownership is no longer a luxury but is a prerequisite to economic opportunity. The need for a...

The consumer groups signing this letter oppose the Taking Account of Institutions with Low Operation Risk Act of 2015 (H.R. 2896) and amendments that will put consumers at risk from dangerous products or practices and undermine the established notice and comment process in place for financial regulations. If adopted, the TAILOR Act could allow financial institutions to justify and exploit...

A letter from seventeen consumer and civil rights advocacy groups to investor and auto dealer, Warren Buffett, urging him to help end discriminatory auto lending practices in this country. In 2014, Mr. Buffett's Berkshire Hathaway purchased the largest privately-held auto dealership group in the nation, the Van Tuyl Group. This letter calls attention to the widely documented problem of "racially...

This written testimony shares our work and insight into the subject of Raised Bill 5071, a bill that has the potential to cause significant harm to Connecticut residents seeking distance education opportunities. Two of key the consequences of the Uniform State Authorization Reciprocity Agreement (SARA) are: Elimination of local, state-centered control over distance education in the state Holding distance education...

The Holder Rule is one of the most important actions the Commission has ever taken in preventing and remedying unfair and deceptive practices in the marketplace. When a seller of a good or service originates or helps arrange credit, the Rule allows consumers to raise the seller’s misconduct as a basis for bringing claims or defenses against the entity holding...