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Comments to the FTC on Motor Vehicle Roundtables

The Center for Responsible Lending, Consumer Federation of America, Consumers for Auto Reliability and Safety, the National Association of Consumer Advocates, the National Consumer Law Center, and on behalf of its low-income clients the National Council of La Raza have filed the following comments to the FTC in regards to the current state of auto lending and the recent motor vehicle roundtables held across the country. In the particular, the comments urge the FTC to: Prohibit auto dealer interest rate markups; End yo-yo scams; Curb loan packing; and Implement steps to ensure that dealers do...

America's Top Consumer Cop Reports to Congress

The Consumer Financial Protection Bureau (CFPB), the nation's first federal agency to focus solely on consumer financial issues, reached an important milestone. The agency's first report to Congress was delivered to the U.S. Senate Banking Committee on January 31 by its recently-appointed Director, Richard Cordray. Speaking to the committee, Cordray said in part, "We plan to use all of the tools available to us to ensure that everyone respects and follows the rules of the road. Where we can cooperate with financial institutions to do that, we will; when necessary, however, we will not hesitate...

Highlights of the New Credit Card Rules: What They Do and Don’t Do

A few provisions of the Credit Card Accountability, Responsibility, and Disclosure Act that President Obama signed into law May 2009 took effect immediately, and a few didn't take effect until August of that year. But most of the provisions took effect February 22, 2010. While these new rules are a significant improvement from the status quo that pervaded credit card policies for years, they are not enough. In the months leading up to the changes that took effect February 22, 2010, credit card issuers adopted tricks and traps intended to evade the law. The Federal Reserve Board, which wrote...

Balancing Risk and Access: Underwriting Standards for Qualified Residential Mortgages

As federal regulators consider setting down-payment standards on new mortgages, this research shows such rules could push 60% of creditworthy borrowers into high-cost loans or out of the market altogether. A proposal by regulators to define a high-quality mortgage as one with at least a 10% or 20% down payment would hobble a healthy segment of the housing market. While higher down payments do result in fewer defaults, the payoff is small relative to the number of creditworthy households who could be shut out of the market. The results are particularly striking for African-American and Latino...

Amicus Brief in De la Cruz v. Wachovia Dealer Services

This case involves borrowers who purchased a vehicle through a dealership in California. The financial institution in question, Wachovia, did not make the loans, but later purchased the installment contracts from the dealer. When the borrower fell behind on their payments, Wachovia repossessed the cars without properly following California law. California allows self-help repossession, but has strict rules regarding consumers' rights in repossession, including the notices that a creditor must send to consumers.

Predatory Payday Lending by Banks on the Rise

Short-term loan carries 365%-plus APR At least four large banks are making payday loans directly to their customers, and more plan to do so. Bank payday loans trap borrowers in debt, like the street corner payday loans that strip $4.5 billion per year from Americans. Bank payday loans often send borrowers into financial devastation. Bank payday lending circumvents state consumer protections; undermines the Pentagon's protection of military personnel; and harm economically vulnerable communities and families. " I was stuck in payday loan hell when I banked with Wells Fargo." - User of Wells...

Foreclosure Counseling: Areas of Greatest Need in 2011

Five years into the foreclosure crisis, borrowers across the country are still struggling with their mortgage payments, and are seeking out the help of housing counselors to help them manage their finances and guide them through the loan modification process. Between 2008 and 2011, the National Foreclosure Mitigation Counseling Program assisted nearly 1.2 million homeowners with foreclosure counseling, and provided mortgage-related legal assistance to more than 32,000 homeowners [1]. Below, we provide an analysis of "Areas of Greatest Need," based on the methodology used in previous rounds of...

Facing the Foreclosure Crisis: Four Urgent Needs to Address Now.

On November 17, 2011, Center for Responsible Lending published new research that shows that the nation is not even halfway through the foreclosure crisis. Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures finds that: (1) foreclosure rates are closely tied to harmful loan terms, and (2) the majority of foreclosures have been experienced by white households, though African-American and Latino families have suffered a disproportionate share of home losses. Differences in income and credit scores do not explain why the foreclosure crisis has hit communities of color harder. For...

Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures

"Lost Ground, 2011" is based on an analysis of 27 million mortgages made over a five-year period. Here are our top-line findings: The nation is not even halfway through the foreclosure crisis. 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk. Foreclosure patterns are strongly linked with patterns of risky lending. Foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash. The majority of people affected by...

Disparities in Mortgage Lending and Foreclosures: Maps and Data

Read our report -- Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures Completed Foreclosures and Serious Delinquencies (2004 – 2008 mortgage originations) STATES By borrower race & ethnicity By borrower income By neighborhood income By neighborhood minority concentration METROPOLITAN AREAS By borrower race & ethnicity By borrower income By neighborhood income By neighborhood minority concentration

Amici Curiae CSJ and CRL in Guillaume

CRL also filed an amicus brief to the New Jersey Supreme Court, advocating for strict compliance with New Jersey's Fair Foreclosure Act and the federal Truth in Lending Act's intentional reordering of the common law rescission process to effectuate Congress's intent that rescission under TILA be a practical tool to save homes from foreclosure. Both statutes play a critical role in preserving homeownership in the face of foreclosure.

Comment to the Federal Reserve on Notice by Capital One to Acquire ING Bank

The Center for Responsible Lending commented on Capital One's proposed acquisistion of ING Bank at a public meeting held by Federal Reserve on September 20, 2011. Summary CRL has done extensive research and policy work addressing checking account overdraft practices that cause significant harm to bank customers. We are concerned that Capital One's current overdraft practices are out of step with significant reforms other large institutions have recently implemented. These practices include continuing to charge high overdraft fees on debit card point-of-sale and ATM transactions, and posting...

HB 484 Transfer Emergency Foreclosure Program to HFA

HB 484 transfers the authority of the State Home Foreclosure Prevention Project (SHFPP), a very important program for NC homeowners at risk of foreclosure, from the NC Commissioner of Banks (NCCOB) to the NC Housing Finance Agency (NCHFA). Since the NCHFA was already administering a number of foreclosure prevention programs, most notably the NC Foreclosure Prevention Fund, this new law is designed to consolidate and streamline these state foreclosure prevention efforts. Both agencies agreed. The transfer preserves all the programs and protections included under the SHFPP. This new law became...

HB 717 Private Mortgage Insurance Premiums

HB 717 bill excludes certain mortgage insurance premiums from our NC definition of "points and fees" in high cost home loans, weakening our predatory mortgage lending protections. The NC Commissioner of Banks (NCCOB) persuaded the bill sponsors to allow NCCOB to investigate these issues further and recommend to the legislature what action, if any, should be taken. Since the bills did not pass either House, they are technically ineligible for consideration, but legislative leadership could insert language in many other places.

HB 773 Studies Act of 2011

HB 773, the omnibus Studies Act of 2011, includes language that would have created a joint study commission on consumer finance loans under $3000 (see page 52). This would be the fourth study commission in 5 years. However, it appears that the studies bill cannot be approved until the short session starting in May 2012. The Senate made several changes to the bill. The House refused to concur with the Senate changes and appointed House conferees, but did so after the Senate adjourned. Since the Senate did not appoint conferees, under the rules the bill is ineligible for consideration until the...

HB 654 Homeowner/Homebuyer Protection Act

SB 1015, the Homeowner and Homebuyer Protection Act, was passed in 2010. This legislation addressed a number of predatory real estate practices that took advantage of families having trouble paying their home loan or finding a decent loan to buy a home. These abuses included foreclosure rescue scams, as well as lease option and contract for deed agreements. HB 654 introduced in 2011 is an attempt to gut these recently enacted protections. After considerable discussion in committee and on the floor, the House passed the bill by a vote of 66 to 48. The Senate held a hearing on the bill in the...

HB 810 Consumer Finance Act Amendments

The North Carolina Consumer Finance Act lets non-bank lenders make installment loans of $10,000 or less. House Bill 810, Consumer Finance Act Amendments, as amended, would have: Increased the maximum loan size from $10,000 to 15,000, Increased the interest charged on these loans, which can already be as high as 54% annual interest, Added numerous new fees, and Continued to allow loan flipping and the sale of expensive add-on products. We conservatively estimated that this bill would cost NC consumers $50 to $70 million in extra interest every year, plus tens of millions of dollars in...

HB 814/SB 559 Fair Compensation for Mortgage Broker/Lender

HB 814 and its companion SB 559, Fair Compensation for Mortgage Broker/Lender would have rolled back mortgage lending protections in our state including: Weakening our predatory mortgage lending protections by raising the limits on allowable fees and discount points, Cutting broker bond requirements in half, a serious problem for borrowers who have been harmed by a broker, and Reducing the oversight of mortgage brokers who are having personal financial problems, as reflected in their credit reports. The NC Commissioner of Banks (NCCOB) persuaded the bill sponsors to allow NCCOB to investigate...

HB 30 Allow Wage Garnishment to Satisfy Judgments

North Carolina allows wage garnishment for certain judgments, such as child support and taxes. House Bill 30 as originally drafted, Allow Wage Garnishment to Satisfy Judgments, would have expanded wage garnishment to other judgments, putting struggling families at severe financial risk. Once concerns were raised with the bill sponsor, the bill was amended significantly to deal with issues raised by the consumer advocates. The amended House Bill 30, which would only allow wage garnishment to be used against businesses that have committed fraud, not against consumers or for debt collection...

Comments to OCC on Overdraft and Bank Payday Loans

CRL supports the principles laid out in the OCC's proposed guidance on overdraft and bank payday loans, but hopes the OCC will dramatically strengthen its guidance to address existing problems and to avoid inadverdently entrenching abuses. Among our recommendations, CRL urges the OCC to act quickly and decisively to stop payday lending before it becomes pervasive among banks. CRL also urges the agency to stop its banks from posting transactions in order from highest to lowest to increase overdraft fees.

AFR Sign-on to OCC on Overdraft and Bank Payday

Consumer groups fear OCC proposed guidance may legitimize and facilitate the spread of payday lending by national banks, and banks would continue abusive overdraft practices—harming bank customers, undermining state payday loan laws, and weakening the long-term safety and soundness of financial institutions.

Qualified Residential Mortgages: How long does it take to save 10%?

Federal regulators are proposing to mandate down payments as high as 20% on future home loans, but even a 10% down payment requirement would stifle economic recovery and lock out responsible home buyers. How Many Years Would it Take These Workers to Save for a 10% Down Payment? Graph: Years to save for 10% down payment by 10 common occupations (PDF) Graph: Years to save for 10% down payment by race and ethnicity (PDF) The housing market of the future can drive economic growth without shutting out responsible home buyers.
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