Research & Policy

On October 29, the Center for Responsible Lending joined a coalition of consumer and civil rights organization to comment on the proposed changes to the Home Mortgage Disclosure Act (HMDA) reporting requirements. Jointly, the groups applauded the utility and growth of the HMDA – which was created as a legislative response to combat urban disinvestment and the practice of redlining...

By Maura Dundon Originally published by American Banker The Consumer Financial Protection Bureau's recent report on private student loans drew a sharp critique from lenders, who claim that the CFPB unfairly singles out private loans while ignoring problems with federal student loans. While the federal loan program has issues of its own, private student loans have distinct concerns. Congress instructed...

The California Department of Business Oversight (DBO) released data on October 3, 2014 showing the extent to which repeat lending comprises the bulk of payday loan activity. Over 75% of all payday loan fees are from borrowers with 7 or more payday loans in 2013. The Center for Responsible Lending's analysis of DBO's data supports the conclusion that, far from...

Attorneys General representing states in the South, Midwest, Southwest and Northeast stand united in support of progressive reforms affecting for-profit college accountability. In a letter to Members of Congress, the officials wrote, "[E]ach of our offices have encountered far too many former and current for-profit school students who have been harmed by the dishonest and unethical practices of some for-profit...

A post-secondary education is increasingly necessary in order to obtain a high-quality job and a lifetime of financial security and wealth-building opportunities. Many students finance their education through student loans because they see its value as an investment in their future. However, according to the research presented in this paper, the value of that investment is questionable for those students...

The 2013 mortgage data submitted by lenders under the Home Mortgage Disclosure Act (HMDA) reflects a slowly recovering mortgage market that troublingly continues to under-serve important market segments. People of color and low and moderate-income families continue to receive a far lower share of mortgage loans than they have historically and than would be expected based on the composition of...

This comment letter signed by 15 organizations supports the CFPB's proposal to make consumer complaint narratives public, and emphasizes the need to do this in the context of student loans. It also provides recommendations on how the complaint intake process could be improved so that more borrowers would be able to submit problems.

On September 16, CRL President Mike Calhoun delivered testimony before the Senate Banking Committee at a hearing called " Examining the State of Small Depository Institutions." In his testimony, he discussed the important role that small lenders and credit unions provide in the financial market and for local communities, emphasizing how different these financial institutions are compared to their larger...

Consumers with lower credit scores often also have low down payments when purchasing a home. As a result, fees for mortgage insurance are added to payments. In these comments, CRL argues for these consumers, citing how higher fees would be another barrier to successful homeownership. Additionally, with the enactment of new mortgage rules, notably QM (Qualified Mortgages), determining an ability-...

As the Federal Housing Finance Agency (FHFA) considers how best to manage mortgage risk CRL responded to its offer for comments. Discouraging fees that would create unnecessary barriers to homeownership, CRL called for a reduction in Guarantee Fees, also known as 'g-fees', and reminds FHFA of its duty to serve the entire market.

CRL provided a comment for the record on some of the issues covered in the Senate Banking Committee's hearing, "Financial Products for Students: Issues and Challenges" held on July 31, 2014. Students must make important choices related to how much they borrow and from what source, as well as how to conduct every day financial transactions and receive financial aid...

View our infographic summary of consumer protections in 2013 Responsible financial products and services play an important role in the lives of Americans: helping families pay for goods and services, manage risk, borrow to build assets and save and invest for the future. However, predatory features of financial products and services can have devastating consequences. They can trap consumers in...

Debt settlement companies offer the promise of settling a consumer's debt for a fraction of what they owe. The idea is simple: debt settlement companies offer to negotiate down the outstanding debt (usually from credit cards) owed to a more manageable amount so that a consumer can become debt free. Unfortunately debt settlement carries significant risks that may result in...

This letter is written to the Chairman of the HELP Committee, Senator Tom Harkin (D – IA), as he seeks to reauthorize the Higher Education Act. The reauthorization aims to make substantive reforms to protect students and address critical student lending issues, including student loan servicing, private student loans, for-profit colleges, and school-bank partnerships.

In these comments, CRL expresses general support for the Consumer Financial Protection Bureau's proposals to amend the 2013 Mortgage Rules under the Truth in Lending Act (Regulation Z). Additionally, CRL calls for more clarity to help prevent potential abuses to legitimate nonprofit organizations and to the right to cure provisions addressing errors.

CRL added its support to a broad coalition calling for the Department of Education to ensure that its final gainful employment rulemaking must be strengthened to protect both students and taxpayers. This comment letter identifies four specific initiatives to ensure that taxpayers dollars do not support waste, fraud or abuse.

On May 27, 2014, the Center for Responsible Lending submitted a comment to the Department of Education in response to their proposed gainful employment rule. In the comment, senior policy counsel Maura Dundon highlights: how for-profit colleges may fail to provide students the skills or education necessary to seek gainful employment, yet still be the beneficiaries of federal financial aid...

Car title loans, like payday loans, are marketed as a quick financial fix, but lead to long-term debt and carry 300% annual interest rates. A typical borrower pays twice as much in interest and fees than she receives in credit extended. Nationally, car title lending drains $4.3 billion annually in excessive fees. Car title lenders systematically disregard a borrower's ability...

Responding to an Advance Notice of Proposed Rulemaking, CRL addresses harmful practices that have become common in the debt buying and third-party debt collection industries. Debt buyers typically acquire charged-off debt without any supporting documentation. Too often account information is inaccurate, outdated or missing, and third-party collectors may use abusive tactics to pursue debt that may or may not be...

CRL and several other consumer and civil rights organizations commend the Office of the Comptroller of the Currency for issuing best practices on banks' sales of charged-off consumer debt. They urge the OCC to strengthen debt management practices further by adopting strict guidance to reduce harm to American families.

The debt collection industry is a rapidly expanding business, with revenue increasing up to 600 percent between 2003 and 2012. Private companies buy billions of dollars of charged-off debt from banks each year. The most common type of debt purchased comes from credit cards, but debt buyers also buy student loans, medical debt and more. As the industry has grown...

Enrolling in a for-profit college usually means higher costs of attendance and higher default rates on student loans. This research brief explores why students of color – African-American and Latino - enroll more frequently in these schools than do white students. CRL also reviews how the Department of Education's proposed Gainful Employment rule could improve student outcomes.

American consumers need strong protections from unfair, deceptive or abusive practices in the payday and small-dollar lending markets. CRL joined Americans for Financial Reform and more than 100 other organizations to urge Richard Cordray, Director of the Consumer Financial Protection Bureau, to pass a broad rule, warning that an overly narrow rule could result in an even deeper debt trap.

Oneshia Herring, legislative counsel at CRL, discusses three reasons why payday loans are an inherently defective product that violate any reasonable concept of fair and responsible lending. This testimony was presented at a CFPB field hearing on March 25, 2014, in Nashville, Tennessee.