Filter Results

Type
Issue

Testimony: A Review of the State of and Barriers to Minority Homeownership

Homeownership is the primary way that most middle-class families build wealth and achieve economic stability. Wide access to credit is critical for building family wealth, closing the racial wealth gap, and for the housing market overall, which in turn, contributes significantly to our overall economy. Today, the opportunity to purchase, maintain and refinance a home has not reached significant portions of low-to- moderate income families and people of color. As a result, these families lag far behind wealthier and white communities that received a head start due to historical lending...

Testimony: Ending Debt Traps in the Payday and Small Dollar Credit Industry

On April 30, 2019, the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions convened a hearing on “ Ending Debt Traps in the Payday and Small Dollar Credit Industry.” Download the full written and oral testimony of CRL's Diane Standaert below: Download the full testimony. (PDF) Download the oral testimony. (PDF) Watch Diane Standaert's opening statement and the entire hearing:

Payday and Car Title Lenders Drain Nearly $8 Billion in Fees Every Year

Payday and car-title loans typically carry annual percentage rates (APR) of at least 300%. These high-cost loans are marketed as quick solutions to a financial emergency. Research demonstrates, however, that they frequently lead to debt that is nearly impossible to escape. In addition, these loans are related to a cascade of other financial consequences, such as increased overdraft fees, delinquency on other bills, involuntary loss of bank accounts, and even bankruptcy. For car-title loans, the end result is too often the repossession of the borrower’s car, a critical asset for many people...

The Failings Of Online For-profit Colleges: Findings From Student Borrower Focus Groups

Until 2010, for-profit institutions constituted the fastest growing sector in higher education. Coinciding with this growth, online college courses and programs expanded rapidly, driven initially by the adoption of online technologies by huge for-profit institutions like the University of Phoenix, Grand Canyon University, and Walden University. The business model for the online component of these schools was characterized by institutional cost savings and user convenience generated by the scalable delivery of instructional material over the Internet.2 Through the ability to market and offer...

Testimony: Ensuring Access to Safe and Affordable Mortgage Loans for All Creditworthy Borrowers

Our Housing Finance System and the GSEs provide essential services to families and lenders across the country. Rural borrowers, small lenders and lower wealth borrowers particularly benefit from these services because the GSEs provide access to a national market, making home loans more affordable overall. The GSEs, though, had critical flaws leading up to the crisis. Since then, fundamental reforms have been made to them, and these changes have addressed systemic risks. Going forward that work needs to be continued and expanded through regulation like that of the utility industry, to ensure...

A Home is More Than a House

A home is more than just where families come at the end of the day—it is also where children are raised and memories are created. Homeownership is the primary way families of modest means build wealth, which can be passed on to the next generation. In recent years, most mortgages approved for lower wealth families and consumers of color were government-sponsored loans: FHA, VA, and USDA. Were it not for these programs, few consumers of color would know the pride—and realize the financial benefits—of homeownership. If America’s housing market is to truly recover, all credit-worthy borrowers...

Drowning in Student Debt

Higher education can be the gateway to a better life. Yet the rising costs of a college education and poor oversight of student loans have left some graduates and former students deep in debt—especially when enrolled in for-profit colleges. The Center for Responsible Lending (CRL) found that students of color enroll more frequently in for-profit colleges than other students, graduate at lower rates, and are left with more debt. Some schools have been accused of deliberately targeting students of color for enrollment in their predatory programs. Download the student debt factsheet. View the...

Auto Lending Practices Can Take You for a Ride

A car purchase can expand economic mobility; but tricks and traps in auto financing can lead to harm and abuse. Among those tricks and traps is dealer interest rate markup. Car dealers can add extra interest to a car loan, and keep some or all of the difference. This practice has a long history of unfair and discriminatory impact. CRL research also suggests that borrowers of color are sold more add-on products and are more likely to be told misleading information about their loan. Recent data and settlements show that many auto loans are made without due consideration of ability to repay...

Abusive Overdraft Fees Drain Consumers Dry

Financial institutions drain billions of dollars annually from their customers through abusive overdraft fee practices. Frequently marketed as a “customer service,” overdraft fees are charged when a customer’s account lacks sufficient funds to cover a transaction and the institution pays the transaction anyway. The institution then repays itself the value of the overdraft transactions and all accompanying fees from the consumer’s next incoming deposit. In doing so, the institution jumps ahead of any other planned transactions. Banks typically charge these fees on debit card point-of-sale (POS)...

The Case Against Illegal Debt Collection

Although debt collection plays an important role in how credit markets function, it can also expose American households to unnecessary abuses, harassment, and other illegal conduct. Unscrupulous debt collectors sometimes use incorrect data and illegal collection tactics to file lawsuits or pressure consumers into making payments on debt they may not owe. Even worse, millions of consumers become aware of lawsuits having been filed against them only after courts have reached judgments on cases frequently based on inaccurate information. Communities of color as well as low and middle-income...

The Debt Trap of Triple-Digit Interest Rate Loans: Payday, Car-Title, and High-Cost Installment Loans

Although marketed as quick cash for financial emergencies, payday and car-title loans typically become long-term debt that drains hundreds of dollars—if not thousands—from consumers. These small dollar loans carry average annual percentage rates of 391% that make it very difficult to escape a cycle of debt that can last months or years. Either through direct access to borrower bank accounts or threats to repossess a borrower’s car, lenders gain extreme leverage over borrowers who come to later understand how unaffordable the loans really are. Besides owing more money for fees than for the loan...

Comments to the Consumer Financial Protection Bureau Proposed Delay of the Payday & Vehicle Title Rule

The organizations listed below submitted this comment letter to the Consumer Financial Protection Bureau (CFPB) on its new leadership’s proposed delay of a 2017 rule the agency had issued to stop payday and car title loans from trapping consumers in debt. The letter rebuts the CFPB’s rationale for proposing a 15-month delay of the payday rule, which the agency is now also moving to gut by removing the common sense requirement that lenders generally verify that borrowers can repay a loan. The organizations joining their voices in opposition to this harmful action are: Center for Responsible...

Debt By Default: Debt Collection Practices in Washington 2012–2016

Debt collection efforts around the United States rely heavily on litigation to collect past due debt. The ease of obtaining default judgments and garnishment orders has led debt buyers to use the courts as a critical tool for extracting payments from consumers, despite the lack of documentation showing that the consumer actually owes the amount claimed. Debt buyers are skilled at using the court system for collection purposes, but the people they sue typically are generally ill-equipped to fight the claims in court on their own and cannot retain counsel. Previous research has established that...

Bill Analysis of Indiana SB 613: Consumer Credit

SB 613 increases the rates for existing consumer loans in Indiana, adds additional high-cost loan products to the marketplace, and significantly increases the rates that are considered to be criminal loan sharking. For each of these changes, lenders are provided extraordinary leverage over the borrower, are able to structure the loans in a way that incentivizes repeat re-borrowing, and are not required to ensure that the loans are affordable in light of a borrower’s income and expenses. This combination of incredibly high-cost loans without any sufficient protections against the harms of...

Toolkit: Tell CFPB to Keep Protections from Payday Loan Debt Traps

In early February 2019, the current Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger released a proposal to gut the CFPB’s 2017 rule aimed at stopping payday and car title loans from trapping people in debt. Director Kraninger’s plan would repeal the heart of the 2017 payday rule, which generally requires that lenders determine a borrower’s ability to repay a loan before making it. The payday loan debt trap is devastating. Download the toolkit for a background on the rule and three ways for you to take action today!

Testimony in Support of HB2588: Regulating the Practices of the Student Loan Industry

This written testimony focuses on three key areas of concern in support of HB 2588 to protect Oregonians from abusive practices by student education loan servicers: Oregon’s student loan debt crisis deepens the racial wealth gap and harms older Oregonians Abuses by student loan servicers prolong and deepen the student loan debt crisis, further increasing the racial wealth gap and harm to older Oregonians The federal rollback of existing protections bolsters need for state action Download the complete testimony. (PDF)

Racial Disparities in Student Debt

The Center for Responsible Lending (CRL) appreciates the opportunity to provide ideas on how to address racial disparities in student debt and the broader challenges faced by students of color in college and career training. We appreciate your commitment to addressing racial disparities in student debt and the broader challenges faced by students of color in college and career training. CRL stands firm in the belief that any legislation seeking to remedy the student debt crisis and disparities in higher education should focus on the outcomes for those who have been traditionally shut out of...

Response to Senate Democratic Caucus Higher Education Act Reauthorization Principles

The Center for Responsible Lending1 (CRL) appreciates the opportunity to provide comments on principles for the reauthorization of the Higher Education Act (HEA). We commend your dedication to reauthorizing the Higher Education Act with the intention of achieving an affordable, accountable, accessible and equitable and safer higher education system. We hope that you will continue to push for a Higher Education Reauthorization Act that holds true to the spirit of the original HEA, which sought to open the doors of higher education to all. CRL stands firm in the belief that any reauthorization...

Proposed Repeal of Payday Loan Rule: Overview & Initial Reaction

The following provides an overview of Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger’s proposal to repeal the CFPB’s 2017 rule aimed at stopping the debt trap of payday and car title loans. This document includes the Center for Responsible Lending’s (CRL’s) initial analysis of the purported rationale for the repeal. As we further consider the proposal, our reactions may evolve. Undeniably, the proposal would result in a significant reversal of key consumer protections for the benefit of lenders who charge interest rates of more than 300% APR. Download the complete PDF.

Testimony in Support of SB19-002: Protecting Coloradans from Abusive Practices by Student Education Loan Servicers

This written testimony focuses on three key areas of concern: 1) abuses by student loan servicers prolong and deepen the problem of student loan debt; 2) For-profit schools disproportionately drive student loan debt nationally and in Colorado; and 3) the federal rollback of existing protections bolsters the need for state action. Download the full testimony. (PDF)

Testimony: For-Profit College Accountability Act

For-profit schools target students of color, low-income students, women, and veterans for enrollment, while failing to provide a quality education enabling students to obtain gainful employment. As is described below, New York for-profit students are more likely to have higher debt loads, lower graduation rates, and higher default rates than other students in the state. Consequently, an inordinate number of low-income students, students of color, and women in New York are left with large loans that they cannot repay and very little to no educational benefit in return. The state can and must...

Banks Must Adhere to Long-Established Sound Banking Principles

The Center for Responsible Lending (CRL) and the National Consumer Law Center (on behalf of its low income clients) (NCLC), joined by Americans for Financial Reform Education Fund, the Leadership Conference for Civil and Human Rights, and NAACP, submit these comments in response to the FDIC’s request for information (RFI) on small-dollar lending. We appreciate the FDIC’s ongoing work to encourage banks to meet consumers’ needs and to promote a more inclusive banking system. Indeed, we are very concerned about the persisting racial disparities the new FDIC unbanked/underbanked survey...

Low-Income Oregonians Report Heavy Debt Levels with Long-Term Consequences

By the Stop the Debt Trap Alliance of Oregon, in partnership with the Center for Responsible Lending (CRL) In 2006, when Oregonians noticed the devastating impact payday and car-title lending was having on their communities, a coalition pushed for a change in the state laws, bringing new consumer protections to hundreds of thousands of people in the state. This example shows the power of communities to make change on issues affecting the day-to-day lives of people in Oregon. Today, community organizations are once again coming together to continue improving the marketplace and economic...

Letter to the CFPB Regarding Ongoing Rulemaking on Debt Collection

One of the most prevalent problems with debt collection is harassing communications from debt collectors that violate consumers’ privacy and can cause serious harm to individuals and their families. In the Consumer Bureau’s survey on debt collection experiences, 42% of consumers who had been contacted by a collector in the past year reported that they had asked the collector to stop contacting them. More than a third of consumers were called four or more times a week and nearly one in five were contacted eight or more times a week. Even worse, 75% of consumers who asked to stop receiving calls...
Displaying 301 - 325 of 1186