Research & Policy

Why do we need the Consumer Financial Protection Agency? First and foremost, we need accountability. The truth is, none of the responsible agencies took action to stop the reckless lending and bad risk management that triggered the economic crisis. When seven different agencies oversee financial institutions, it's easy to create loopholes and point fingers at someone else. The CFPA will...

U.S. House and Senate proposals promise significant reform Regulators have failed to stop our nation's financial institutions from moving from a policy of discouraging overdrafts to that of encouraging and maximizing overdrafts to drive up fees. The Overdraft Protection Act of 2009, H.R. 3409, introduced by Congresswoman Carolyn Maloney in October 2009, would make meaningful reform with measures similar to...

Eric Halperin, director of CRL's DC office, submitted testimony to the Financial Services Committee of the U.S. House on H.R. 3904, the Overdraft Protection Act of 2009. He called the Act a crucial measure for protecting consumers from abusive bank overdraft fees, which have reached $23.7 billion per year. The Federal Reserve Board has failed to address the problem, and...

Banks and credit unions skim cash from accounts through unfair overdraft practices Rather than discouraging customers from overdrawing their accounts, the system most banks and credit unions now use creates additional overdrafts and maximizes the number of fees they can charge. CRL finds that bank fees for overdrafts increased 35 percent in two years, rising to nearly $24 billion per...

CRL shares stories of everyday people affected by financial abuse and emphasizes the need for the Consumer Financial Protection Agency to ensure that they and others are protected from such abuses in the future. The Dow closes at 10,000 points, putting it back to where it was a year ago when Lehman Brothers collapsed, and Wall Street rejoices. But the...

CRL shares stories of everyday people affected by financial abuse and emphasizes the need for the Consumer Financial Protection Agency to ensure that they and others are protected from such abuses in the future. The Dow closes at 10,000 points, putting it back to where it was a year ago when Lehman Brothers collapsed, and Wall Street rejoices. But the...

October 20, 2009 Members, Financial Services Committee U.S. House of Representatives Washington, DC 20510 Dear Representative: As the Financial Services Committee prepares to continue its markup of H.R. 3126, we write to express our support for a strong, non-preemptive Consumer Financial Protection Agency (CFPA). In this regard, we call your attention to two issues that are expected to come up...

October 20, 2009 Members, Financial Services Committee U.S. House of Representatives Washington, DC 20510 Dear Representative: As the Financial Services Committee prepares to continue its markup of H.R. 3126, we write to express our support for a strong, non-preemptive Consumer Financial Protection Agency (CFPA). In this regard, we call your attention to two issues that are expected to come up...

A report by the Center for Community Capital at the University of North Carolina provides evidence that allowing national banks to ignore state lending laws encouraged these banks to increase subprime lending, and that states with stronger lending laws have had lower foreclosure rates. [1] The study analyzes lending patterns and loan performance before and after 2004, the year the...

The US House Financial Services Committee heard from 30 consumer groups including CRL via an October 6, 2009 sign-on letter about ongoing auto financing scams. The National Association of Car Dealers (NADA) is lobbying hard for exemption from the CFPA (HR 3126). CRL and its allies strongly urge Committee members to ensure that the proposed consumer protection agency has strong...

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Today's overdraft practices are designed to drive up the fee revenue of banks and credit unions and not to discourage customers from overdrawing their accounts. Our report shows that fees are climbing very quickly and affecting millions of Americans every year. Over 50 million Americans overdrew their checking account at least once over a 12 month period, with 27 million...

How has your state fared in the financial crisis? These state-by-state fact sheets show some of the major costs of bad lending in recent years. They include delinquencies and foreclosures, the cost of bank overdraft loans and, where applicable, the cost of payday lending. We also include data showing the share of high-rate (subprime) mortgages made by national banks that...

Full Session Law This act, which became effective October 1, 2009, prohibits deficiency judgments on predatory home loans in North Carolina. A deficiency judgment is a lender's way of recovering the balance owed on a loan in the event that the proceeds of a foreclosure sale do not fully cover the amount owed. Under this law, deficiency judgments are restricted...

Full Session Law This bill clarified what constitutes a violation of reasonable accommodation requirements under the Fair Housing Act. While the required accommodations are not new, the modified structure of the bill clarifies that discriminatory intent is not required to establish unlawful housing discrimination. The amendment went into effect on October 1, 2009. The following are accommodations are required, under...

Full Session Law This act, which became effective October 1, 2009, increased the amount of home equity protected against creditors. This "homestead exemption" was raised from $18,500 to $35,000 per individual. Since the exempted amount is per individual, $70,000 is protected for a married couple. For homeowners aged 65 or older who previously owned the home with their deceased spouse...

Full Session Law This bill made technical and clarifying changes to anti-predatory lending laws for high-cost and rate-spread mortgages. The law became effective October 1, 2009. High-Cost Loans For high-cost loans, the bill clarified the definition of points and fees to include costs paid by the borrower "at or before closing". Rate-Spread Loans After the updates made through this bill...

Full Session Law This law, which went into effect October 1, 2009, strengthened consumer protections in the areas of foreclosure and debt buying activities. Foreclosure Protections Under this law, the clerk of the court may delay foreclosure hearings for owner-occupied residences by up to 60 days, if the clerk finds good cause to believe the additional time has a reasonable...

Full Session Law This law rewrote the NC Mortgage Lending Act to conform with new federal legislation. Though the bulk of the law remains the same, some new protections were added, including: An increase in the bond required for mortgage brokers, to between $75,000 to $250,000 depending on the broker's activity. Previously the bond requirement was a flat $50,000 An...

Full Session Law As in the past, a homeowners association may impose liens on properties if the owners have balances that are at least 30 days overdue to the association. However, this law, effective October 1, 2009, adds the requirement that they first notify the homeowner. The homeowners association must make reasonable and diligent efforts to ensure that its records...

SB 974, SB 974, which had the strong support of Attorney General Roy Cooper, includes important new consumer protections in two distinct areas: Greater protections for homeowners during the foreclosure process; and greater protections for consumers against abusive debt buying activities. Foreclosure protections: This new law allows a clerk of court to continue (delay) a foreclosure hearing for up to...

CRL's views on the proposed Consumer Financial Protection Agency. CRL President Michael Calhoun testifed before the House Financial Services Committee on September 30, 2009, stressing the importance of an independent agency that also preserves the ability of states to take action to protect consumers.

By Debbie Gruenstein Bocian and Keith S. Ernst A working paper recently released by the Columbia Business School, "Liar's Loan? Effects of Origination Channel and Information Falsification on Mortgage Delinquency" [1] reported three main findings: (1) mortgages originated through brokers are more likely to become delinquent than similar mortgages made through retail channels; (2) mortgages with low levels of income...

An essential component of the Obama Administration's proposal for improving oversight of our financial system would correct the current lack of adequate consumer protection standards that has plagued our financial system, and imperiled our economy. A new Consumer Financial Products Agency ("CFPA") would implement sensible protections and make sure that companies follow them. In addition to mortgages, the CFPA would...

An essential component of the Obama Administration's proposal for improving oversight of our financial system would correct the current lack of adequate consumer protection standards that has plagued our financial system, and imperiled our economy. A new Consumer Financial Products Agency ("CFPA") would implement sensible protections and make sure that companies follow them. In addition to mortgages, the CFPA would...