Today, more than 44 million Americans are crushed under the weight of $1.7 trillion in student loan debt. This debt prevents borrowers – in red states and blue states, urban and rural communities – from fully participating in the American economy. It delays or denies borrowers the opportunity to buy a home, start a business, or invest in retirement, thereby widening the wealth gap for borrowers from families with modest means.
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This CRL letter to Congress expresses support for the Federal Housing Finance Agency (FHFA) updates to its mortgage pricing framework, including FHFA’s assessment on lenders of fees known as Loan Level Pricing Adjustments (LLPAs). The letter also urges Congress to reject H.R. 3564, the so-called Middle-Class Borrower Protection Act, a bill that would rescind FHFA’s recent updates.
The undersigned organizations commend the Department of Financial Protection and Innovation (DFPI) for moving to regulate abusive fintech lenders, including earned wage advance providers. We are very pleased to support the proposed rules and encourage the DFPI to vigorously enforce them to ensure that California’s most vulnerable consumers are not harmed. Signatories California Employment Lawyers Association (CELA) CA Labor Federation CA League of United Latin American Citizens (CA LULAC) California Low-Income Consumer Coalition (CLICC) California Reinvestment Coalition (CRC) Center for...
The Center for Responsible Lending (CRL) and the National Consumer Law Center (NCLC) expressed support for the Department of Financial Protection and Innovation’s (DFPI) proposal to clarify that fintech cash advances are covered by the California Financing Law (CFL), including its fee and interest rate limits. The proposal requires that lenders be licensed under the CFL, with a temporary licensing exception for employer-based advances by firms that register under the California Consumer Financial Protection Law.
The CFPB plays an integral role in the nation’s financial system. The Bureau’s work ensures that the system functions in a manner that is responsive to the interests of all market participants—consumers, large financial entities, and smaller institutions like Amici . Congress’s chosen method of funding the Bureau underpins the Bureau’s ability to do this important work, free from the outsized influence of any one market segment. Petitioners’ brief convincingly demonstrates that nothing in the text or history of the Constitution—or any decisions of this Court—supports the Fifth Circuit’s...
The 261 organizations representing millions of students, workers, people of color, veterans, people with disabilities, consumers, and people of faith write in strong opposition to bicameral efforts to use the Congressional Review Act (CRA) to overturn President Biden's actions to pause student loan payments and provide student debt relief for low-income and working-class Americans continuing to recover from the deadly COVID-19 pandemic and its devastating economic fallout.
The U.S. Supreme Court recently heard arguments in two cases challenging the Education Department’s debt relief program. The first lawsuit, Biden v. Nebraska, was filed by several Republican-controlled states claiming that debt relief will hurt the profits of a private student loan servicer chartered by one of the states and may negatively affect future state tax revenues. The other suit, Department of Education v. Brown, was filed by the conservative organization Job Creators Network Foundation Legal Action Fund on behalf of two individual student loan borrowers claiming to be opposed to the...
From the introduction to the letter: On behalf of the undersigned national, state, and local organizations, we urge you to oppose the dangerous package of bills titled the “CFPB Transparency and Accountability Reform Act” that threaten the Consumer Financial Protection Bureau’s (CFPB) funding, organizational structure, and its ability to monitor the marketplace by impeding their rulemaking functions. This package would irreparably harm the CFPB’s effectiveness and ultimately consumers.
CRL and more than 50 organizations committed to gender justice submitted a comment in support of strengthening the Department of Housing and Urban Development (HUD) Proposed Rule on Affirmatively Furthering Fair Housing, which was published in the Federal Register on February 9, 2023 (HUD Docket No. FR 6250-P-01) (Proposed Rule).
Opportunity Financial, also known as OppFi, is a consumer lending company based in Chicago, Illinois that offers personal installment loans. Their marketing suggests they are providing an essential service to the credit and income constrained; their products, however, carry triple-digit Annual Percentage Rates (APRs). Public filings reveal a business model built around high levels of delinquency and default . According to its website, OppFi’s stated mission is to “empower everyday consumers to rebuild their financial health," but the company is a legacy subprime lender. OppFi uses a rent-a...
Opportunity Financial, also known as OppFi, is a consumer lending company based in Chicago, Illinois that offers personal installment loans. Although OppFi’s stated mission is to “empower everyday consumers to rebuild their financial health,” OppFi is a legacy subprime lender. The company uses a rent-a-bank scheme to evade consumer protections and charge customers triple-digit interest rates on its personal installment loan product. In a rent-a-bank scheme, a lender partners with an out-of-state bank. The lender uses that bank’s charter to make loans at rates up to five times greater than the...
In response to a Federal Trade Commission (FTC) notice that it intends to issue regulation, CRL joined a coalition of consumer groups in calling for FTC action to rein-in junk fees. Among other topics, this comment letter highlights a CRL report on installment loan companies that would tack on credit insurance and “automobile club memberships” – charges that meet multiple characteristics of junk fees, including that they’re often a surprise to the consumer and that their value to the consumer is limited or nonexistent. The letter was also signed by: Accountable.US AKPIRG American Economic...
CRL submitted this letter for the record on the Subcommittee on Higher Education and Workforce Development hearing entitled, "Breaking the System: Examining the Implications of Biden's Student Loan Policies for Students and Taxpayers."
National CAPACD, NALCAB, and the Center for Responsible Lending submitted this letter to support the Consumer Financial Protection Bureau’s (CFPB) final Section 1071 regulation which will improve relationship banking by creating a robust and comprehensive data collection regime that helps ensure that small business lending is fair and accessible to entrepreneurs from all communities in the United States.
Coalition Comments to FDIC Regarding Community Reinvestment Act Examination of First Electronic Bank
Accountable.US, Americans for Financial Reform, Center for Responsible Lending, Consumer Action, Consumer Federation of America, National Consumer Law Center (on behalf of its low- income clients), National Community Reinvestment Coalition, Public Citizen, US PIRG and the Woodstock Institute submitted comments for the Community Reinvestment Act (CRA) examination of First Electronic Bank. First Electronic Bank helps at least two nonbank lenders make predatory loans at rates up to 180% annual percentage rate (APR) that they cannot legally make directly. The loans that First Electronic Bank...
Cash-strapped borrowers are being enticed into using the home equity they have accumulated as an ATM and cash-out refinance loans will damage their long-term financial health.
Earned Wage Advance (EWA) providers market a means for workers to access their wages before payday, usually for a fee. In reality, there are two very different types of products that are marketed as EWA, one of which—sometimes called “faux EWA”— is simply a payday loan dressed up in “fintech” marketing. While low-wage workers can benefit from true EWA programs that are properly designed and regulated, they can instead be harmed when products are allowed into the marketplace without guardrails that keep their use and cost within reasonable bounds. States should regulate all EWA products as...
CRL policy counsel Monica Burks recommends Vermont lawmakers decline to codify an Earned Wage Advance business model that could risk enabling payday lending-like debt traps in a state with an 18% usury cap.
From the comment: Accountable.US, Americans for Financial Reform, Center for Responsible Lending, Consumer Action, Consumer Federation of America, National Consumer Law Center (on behalf of its lowincome clients), National Community Reinvestment Coalition, Public Citizen, US PIRG and the Woodstock Institute submit these comments in connection with the Community Reinvestment Act (CRA) examination of FinWise Bank. FinWise Bank helps several nonbank lenders make predatory loans at rates up to 160% annual percentage rate (APR) that they cannot legally make directly. The loans that FinWise...
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 products as credit and require compliance with consumer protections that prevent predatory lending debt traps commonly associated with payday loans. Download to continue reading
The Center for Responsible Lending submitted a letter for the record on the House Committee on Financial Services’ Subcommittee on Financial Institutions and Monetary Policy hearing entitled, “Consumer Financial Protection Bureau: Ripe for Reform.” The letter details the importance of the CFPB and draws on new data from Republican polling firm Chesapeake Beach Consulting and Democratic firm Lake Research Partners shows that 79 percent of voters across the political spectrum – including 64 percent of independents and 75 percent of Republicans – overwhelmingly support the mission of the CFPB to...
The following organizations signed on to a letter to Michael Hsu, Acting Comptroller of the Office of the Comptroller of the Currency, urging him to act and ensure that OCC-supervised banks make necessary reforms to their inequitable overdraft programs. Accountable.US Americans for Financial Reform Education Fund California Reinvestment Coalition Center for Responsible Lending Consumer Action Consumer Federation of America Consumer Reports The Leadership Conference on Civil and Human Rights NAACP National Consumer Law Center (on behalf of its low-income clients) Revolving Door Project UnidosUS...
A report released in January of 2023 attempts to provide cover for the predatory practices of payday lenders, who charge average 400% annual interest on loans that routinely create a long-term cycle of debt that sends borrowers into deep financial insecurity. The Consumer Financial Protection Bureau (CFPB) found that 75% of payday lender fees are collected from borrowers with 10 or more loans per year, indicating the reliance of payday lenders on a business model of long-term debt. Eighteen states and D.C. have stopped this debt trap by implementing a rate cap of 36% or less, including fees...
In response to the questions posed in the VA’s October 17, 2022 Advance Notice of Proposed Rulemaking, the National Consumer Law Center (on behalf of its low-income clients) and the Center for Responsible Lending urge VA to expand the opportunities available to help veteran borrowers avoid foreclosure. The mortgage relief options available for veteran borrowers should not be less favorable than the options available to other borrowers and should provide relief in all market conditions. We appreciate the VA’s engagement with stakeholders and look forward to working with you to find solutions...
Previous research by the Center for Responsible Lending (CRL) has revealed the harms associated with high-cost installment loans, which are often marketed to subprime borrowers and have annual percentage rates of interest (APRs) in excess of 36%. This paper explores a different segment of the installment loan market: loans made by consumer finance companies with rates at or below 36% APR that have larger, longer terms and are often packed with fees for low-value, high-cost add-on products. The costs of these products are not included in the loans’ APRs. Using a sample of 67 collections cases...