Research & Policy

Even in the face of strong opposition by banking regulators, a few banks continue to make triple-digit payday loans. In this chapter, our analysis shows no meaningful distinction between storefront payday lending and bank payday lending. Banks give their products names such as "Ready Advance" and "Early Access," but these loans come with the same predatory features and produce the...

Payday loans—high-cost, quick-fix loans that trap borrowers in debt by design—cost cash-strapped American families $3.4 billion in fees every year. Of that number, more than two-thirds—$2.6 billion--is a direct result of churning borrowers into loan after unaffordable loan. This churning dramatically increases payday lending fees without providing borrowers with access to new credit. Payday loans have multiple features that make...

In this analysis of the fifth report by the Monitor of the National Mortgage Settlement, the Center for Responsible Lending concludes that borrowers have benefitted from more transparent oversight of the negotiated servicing practices by participating banks. With more than $51 billion in gross benefits have been provided to 643,000 borrowers, CRL also poses questions on outstanding items.

The financial harm caused by over 12.5 million foreclosures from 2007-2012 is the focus of this brief, the fifth in a series of updated on related findings. Between 2007 and 2012, over 12.5 million homes have gone into foreclosure. These foreclosures directly harm the families that experience them, obviously, and they also have negative effects that extend to the neighborhood...

As various proposals call for mortgage lending reform, CRL speaks to the importance of preserving broad access to credit. This fact sheet also explains how government-mandated down payments would deny many consumers the chance to become first-time homebuyers.

August 8, 2013 This legislative session was truly like no other in recent history. Many changes to existing laws were made, and certainly our laws protecting consumers from predatory lending were targeted. A stated objective of the 2013 legislature was to reduce regulation and revise North Carolina's business-related laws to be no more stringent than federal law. This, coupled with...

Although the Military Lending Act has resulted in significant improvements, Service members continue to be the target of predatory lenders. In 2012, members of the military filed 61,642 complaints with the Federal Trade Commission's Military Sentinel system. Twenty-two percent of complaints filed by enlisted members were about debt collection, banks/lenders and credit cards. The Department of Defense (DoD) invited comments...

Since 2008, 1.4 million homeowners have benefited from the National Foreclosure Mitigation Counseling Program. Additionally, over 39,000 of these consumers have also received mortgage-related legal assistance. Yet more efforts are still needed. This 2013 document identifies the nation's "areas of greatest need".

In spite of regulatory changes in recent years, many banks and credit unions continue to charge abusive fees on debit cards and checking accounts. In "High-Cost Overdraft Practices," CRL discusses these findings: In 2011, overdraft fees cost consumers $16.7 billion. Debit card transactions trigger the most expensive fees. On debit card purchases, the median overdraft charge is $35 for a...

On July 24, 2013, Rebecca Borné, senior policy counsel for CRL, testified before the Senate Special Committee on Aging on how payday lending affects senior citizens. In her testimony, Rebecca made the following points: CRL Testimony Watch Rebecca's testimony. The Payday Trap Watch Annette's testimony. Payday loans are designed to create a long-term debt trap. Payday loans cause borrowers severe...

Michael Calhoun, CRL President, testified before a House Financial Services Committee hearing on housing finance reform and the future of homeownership. This testimony shares CRL's belief that all proposals preserve access to affordable mortgage credit.

Car-title lending — making expensive loans secured by the title of a vehicle a borrower owns out-right — has become a multi-billion dollar industry in the U.S. over the last decade. CRL estimates that car-title lenders generate nearly $2 billion in loans annually, with borrowers paying more than $4 billion in fees — twice the amount loaned — in the...

Dodd-Frank Financial Reform charged the Consumer Financial Protection Bureau (CFPB) to set basic mortgage definitions that would be easily understood by lenders and borrowers alike. In January 2013, CFPB issued the Qualified Mortgage (QM) rule that requires full documentation, the elimination of risky mortgage terms and limits up-front fees to no more than three points on 30 year mortgages. Now...

June 20, 2013 Learn about a pair of stalled payday lending bills, a bill to authorize predatory car title lending bill, a just signed consumer installment loan law that raises rates and fees, and a predatory mortgage lending bill in committee in our June 2013 NC legislative update. Payday bills stalled (SB 89/HB 875) Car title lending bill stalled (HB...

The Consumer Financial Protection Bureau (CFPB) mortgage rules strike the right balance between protecting consumers while also enabling lenders to comply with these new reforms. Throughout the rulemaking process and in the final result, the CFPB has taken a measured and reasonable approach. As a result, these mortgage rules will provide important legal protections for borrowers and for lenders. The...

Dual tracking is the servicer practice of simultaneously pursuing loan modifications and foreclosure proceedings. This chart offers a side-by-side comparison and analysis of how the National Mortgage Settlement, the California Homeowner Bill of Rights, and related rules from the Consumer Financial Protection Bureau have each taken steps towards eliminating this practice. The comparison includes variances in rule applications, borrower outreach...

Dual tracking is the servicer practice of simultaneously pursuing loan modifications and foreclosure proceedings. This chart offers a side-by-side comparison and analysis of how the National Mortgage Settlement, the California Homeowner Bill of Rights, and related rules from the Consumer Financial Protection Bureau have each taken steps towards eliminating this practice. The comparison includes variances in rule applications, borrower outreach...

The Center for Responsible Lending responds to a recent National Bureau of Economic Research working paper "The Vulnerability of Minority Homeowners in the Housing Boom and Bust," outlining flaws in the paper's analysis and methodology. Most importantly, CRL disputes the authors' conclusions that disparate default rates should call into question the value of homeownership in addressing the racial wealth gap.

As the Consumer Financial Protection Bureau refines mortgage rules, CRL addresses how mortgage put-backs by GSEs should affect the Qualified Mortgage status of mortgage loans. CRL also support CFPB's rule that state servicing standards will not be preempted by Federal rules.

We write to thank the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) for the proposed guidance addressing bank payday lending, particularly the underwriting requirements and limits on repeat loans. These critical provisions address a central problem with payday lending: lenders’ failure to verify the borrower’s ability to repay the...

A key mortgage reform included in the Dodd-Frank Wall Street Reform and Consumer Protection Act is at risk of being weakened by new legislation submitted during the 113th Congress. House bill H.R. 1077 would create loopholes in the definition of "Qualified Mortgage" and, as a result, allow higher-fee mortgages to improperly gain Qualified Mortgage status. The Qualified Mortgage designation is...

Should federally-insured credit unions push payday loans with triple-digit interest rates? CRL and the National Consumer Law Center (NCLC) say no, urging the National Credit Union Administration (NCUA) to stop its members from making these types of predatory loans. Most credit unions conduct responsible lending that does not include payday-type loans. However, NCLC has identified nine federal credit unions that...

This brief, co-authored by CRL and Consumers Union, examines recent legal and regulatory efforts to help troubled homeowners avoid foreclosure. These include rules by the Consumer Financial Protection Bureau to standardize how servicers act and communicate with homeowners, the National Mortgage Settlement negotiated with major servicers by 49 state Attorneys General, California's Homeowner Bill of Rights, and other state laws...