Research & Policy

Among the hottest consumer finance topics in recent years is the proliferation of online lenders offering fintech cash advances, including the subset of those lenders who offer earned wage advances (EWA). These are very short-term loans of small dollar amounts that users can access through a smartphone app. Lenders that offer these products strenuously attempt to avoid being regulated like...

Online lenders offering earned wage and cash advances primarily through cell phone apps have proliferated in the past decade, with companies claiming that existing credit laws do not apply to their products. As a result, consumers have not been made aware of the true costs and potential harms of advances. Research by CRL and others has demonstrated using these fintech...

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Earned wage advances (EWA) are small, short-term loans that are typically repaid on the consumers’ next payday. Research by CRL and others has demonstrated using these fintech cash advances leaves many consumers worse off - paying high fees for small loans, increasing their risk of overdraft, and having to reborrow paycheck after paycheck. Regulators should enforce credit laws to increase...

The Center for Responsible Lending (CRL) and the National Consumer Law Center (NCLC) submitted an amicus brief urging the U.S. Court of Appeals for the 10th Circuit to correct the lower court’s misinterpretation of a Colorado law, and the federal law on which it is based, in order to prohibit out-of-state banks from helping lenders charge Colorado borrowers interest rates...

Public interest organizations, appalled by the Walt Disney Company invoking its restrictive terms of use to evade accountability for the death of a consumer on its premises, wrote to Congress in support of an immediate mark up to the Forced Arbitration Injustice Repeal Act (the FAIR Act), S.1376 and H.R. 2953 so that this legislation may be brought to a...

A new poll from the bipartisan polling team Lake Research Partners and Chesapeake Beach Consulting provides fresh evidence that voters across the political spectrum solidly support a strong Consumer Financial Protection Bureau (CFPB) and tough oversight of Wall Street. This support reaches across blue and red states, and is, in some cases, higher in the battleground states of this year's...

In the 1990s payday lenders partnered with banks to create a practice known as Rent-a-Bank. This practice, which has now moved online, exploits a provision of federal law that allows banks to export their interest rates across the country, ignoring state laws meant to protect borrowers from abusive high-rate lending that can lead to a debt trap. Rent-a-Bank arrangements allow...

The Center for Responsible Lending, the National Consumer Law Center, and Consumer Federation of America commend the CFPB for affirming that paycheck advance loans, regardless of their characterization by lenders, are credit products subject to federal disclosure requirements. As written, the proposed interpretive rule by the Consumer Financial Protection Bureau regarding the applicability of the Truth in Lending Act (TILA)...

The consumer, labor, civil rights, legal services and community organizations wrote with strong support of the Consumer Financial Protection Bureau’s proposed interpretive rule on emerging paycheck advance products, sometimes marketed as “earned wage” products.

CRL and Americans for Financial Reform Education Fund (AFREF) support the proposed rule which amends the Fair Credit Reporting Act Regulation V to prohibit creditors and consumer reporting agencies from using medical debt information for credit eligibility determinations or providing medical debt information that a creditor is prohibited from using. The Fair Credit Reporting Act was enacted, in part, to...

These organizations support the CFPB’s conclusion that accounts used to access BNPL credit are credit cards that must comply with credit card rules governing disputes, errors, periodic statements and disclosures. Those protections will enhance the safety of BNPL credit and make it easier for consumers to manage their finances.

The Center for Responsible Lending submitted a comment to the Consumer Financial Protection Bureau on their interpretive rule regarding Buy Now, Pay Later (BNPL) digital user accounts.

The nation’s leading residential solar energy financing lenders operate under a business model that uses many of the predatory methods employed in the subprime mortgage lending market of 2007-2010.

Several consumer groups sent a letter to the OCC on July 19, 2024 urging the agency to rescind the 2011 preemption regulations or to revisit them and conduct the five-year review mandated by the Dodd-Frank Act.

The undersigned consumer organizations and attorneys write to urge the Consumer Financial Protection Bureau to issue a final PACE rule. Last year, we applauded the Bureau for proposing a strong rule that would ensure PACE borrowers receive critically important consumer protections under Regulation Z. But the proposed rule came five years after Congress amended the Truth in Lending Act (TILA)...

More than 120 affordable housing, consumer, health, energy efficiency, environmental, business, and other organizations at the national, state, and local levels joined this letter to urge the FHFA to direct the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, to join the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA) in requiring that all new...

From the comment's introduction: Many mortgage lenders are willing to offer cash-out refinances because the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac, the Federal Housing Administration (FHA), or the Department of Veterans Affairs (VA) bear the credit risk. However, fewer lenders are willing to make home equity loans, especially to borrowers with lower credit scores, given the associated...

CRL submitted a comment on the Proposed Rule by the U.S. Department of Education on Student Debt Relief for the William D. Ford Federal Direct Loan Program (Direct Loans), the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins) Program, and the Health Education Assistance Loan (HEAL) Program. The Proposed Rule is critically important to Black, Latino and...

Earned or Early Wage Advance (EWA) products offer workers access to their wages before payday, usually for a fee. While low-wage workers can benefit from EWA programs that are properly designed and regulated, they can instead be harmed when products are allowed into the marketplace without guardrails keeping their use and cost within reasonable bounds. States should regulate all EWA...

The 193 labor, civil rights, consumer, legal services and community groups and academics joined in this letter to express opposition to the draft Earned Wage Access Consumer Act. In the guise of offering protections, the bill obscures its true effect: to exempt fintech cash advances from the Truth in Lending Act, to endorse a form of loan that makes workers...

Consumers who took out small loans using cash advance apps paid triple-digit annual interest rates, experienced high levels of repeat reborrowing, and incurred more bank overdraft fees.

CRL submitted a comment on the CFPB’s Notice of Proposed Rulemaking on overdraft fees for very large institutions. We advocate for a $6 benchmark and safe harbor for courtesy overdraft fees. We argue the proposed rule is a required and important step towards better protecting consumers that would be greatly improved by eliminating the potential for financial institutions to evade...

The National Consumer Law Center, on behalf of its low-income clients, and the Center for Responsible Lending write with recommendations on how FHA should shape its post-COVID loss mitigation waterfall. As the market turns from a response to COVID-19 to identifying permanent policies informed by lessons learned from the pandemic, FHA has an opportunity to strengthen the options it makes...

This legislation purports to provide a safe harbor for financial innovation, but too often, “innovation” is synonymous with a lack of meaningful safeguards for consumer financial products. Creating these regulatory “sandboxes” for companies would force agencies to shirk their statutory duties to enforce the law and protect consumers and instead prioritize allowing risky and unproven products into the marketplace before...