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Advocates Urge Auto Repair Chains, Including AAMCO, Meineke, and Midas, To Stop Offering Predatory Loans

A coalition of consumer advocacy groups sent letters to major national auto repair chains AAMCO and Precision Tune Auto Care (Icahn Enterprises), Big O Tires and Midas (TBC Corporation), Grease Monkey (FullSpeed Automotive), JiffyLube, and Meineke (Driven Brands) urging their stores and franchisees to stop offering financing through EasyPay Finance and Utah-based TAB Bank, which issue loans at rates up to 189%, even in states where that rate is illegal.

Necessary Relief: Substantial Cancellation Will Ease the Burden of Unaffordable Student Debt (and Boost the Economy)

The student debt crisis has been building for decades, and millions of families have seen their dreams derailed by unaffordable debt repayment burdens that block their path to financial stability. As college costs rose, students had to take on increasing amounts of debt to pay for higher education. At the same time, state student financial aid offerings were drastically reduced, forcing students and families into long term debt that often grew to be unaffordable over time. Due to longstanding discrimination, students and families of color have less personal, family, and intergenerational...

Small Business Matters: Forgive PPP Loans and Strengthen Section 1071

Next to owning a home, business equity is the largest source of wealth in the United States. Small businesses are the backbone of the American economy, providing almost half of all jobs in the U.S. and creating nearly two-thirds of all new jobs. Yet barriers to credit access prevent Americans from starting businesses and building generational wealth, further widening the racial wealth gap. Congress and federal agencies are charged with enforcing fair lending laws and ensuring equitable access to capital, but don’t have the data they need to answer basic questions about small business lending...

Student Loan Industry Failure Could Jeopardize Help for Millions of Low-Income Borrowers

Today, the Student Borrower Protection Center (SBPC), National Consumer Law Center (NCLC), Student Debt Crisis Center (SDCC), and Center for Responsible Lending (CRL) sent a letter to the largest trade organizations representing student loan lenders and servicers underscoring their legal obligation to faithfully implement the U.S. Department of Education’s (ED) recent fix for income-driven repayment (IDR).

CFPB Should Protect Consumers From “Junk Fees”

The Center for Responsible Lending (CRL), along with Americans for Financial Reform (AFR), Consumer Federation of America (CFA), the National Community Reinvestment Coalition (NCRC), and National Consumer Law Center (NCLC) (on behalf of its low-income clients) submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to their call for public input on how to save Americans billions in junk fees charged by financial companies, leading consumer advocacy organizations submitted an extensive comment letter detailing junk fees across a wide range of consumer financial...

Adjustments to Help the FHA Streamline Refinance Program Reach More Low-Wealth Families

Many FHA borrowers took advantage of record-low interest rates during the COVI9-19 pandemic and refinanced their mortgage. However, as of November 2021, there were over 4 million FHA borrowers who could realize a substantial reduction in their monthly payments by refinancing but had not done so. The average borrower in this cohort would save $229 per month ($2,750 per year) by refinancing their mortgage. Low-to-moderate income (LMI), Black, and Hispanic households had slower refinancing rates compared to higher income, White, and Asian households during the pandemic-induced refinancing wave...

Adding Eligibility for First-Generation Homebuyers to the GSE Affordable Housing Programs

Two vital elements of social and economic mobility are to increase the homeownership rate by enabling more non-homeowners to become first-time homebuyers and reduce the racial disparities in homeownership rates caused in large part by deliberate discriminatory policies and practices. The Government Sponsored Enterprises (GSEs) have the ability to improve both through their affordable housing goals and lending programs. The National Fair Housing Alliance (NFHA) and Center for Responsible Lending (CRL) believe that the Federal Housing Finance Agency (FHFA) should expand the eligibility of the...

Buy Now, Pay Later: No Free Pass from Consumer Protections

The exploding market of Buy Now Pay Later (BNPL) credit demands the same level of oversight that we give to credit cards. BNPL can help some borrowers spread out their payments, but entails real risks and costs, which is not clear in advertisements highlighting interest-free payments and “no impact” on credit scores. Regulation is necessary to protect consumers from hidden harms and costs to promote true financial inclusion. Online and in-store retailers now commonly offer BNPL plans, which allow consumers to make purchases in installments, typically four payments over six weeks. Lenders...

Banks, Credit Unions and Consumer Groups Urge Congress to Close the Industrial Loan Company Loophole

A broad coalition of bank and credit union associations and consumer organizations submitted a letter to the U.S. House Committee on Financial Services urging passage of the bipartisan Close the ILC Loophole Act. The bill would help prevent more companies from running what is essentially a bank without the necessary regulatory oversight.

Income-Share Agreements Burden Students with Unfair Terms and Unforeseen Costs

“Income-share agreements,” or ISAs, fund a portion of educational costs in exchange for a percentage of a student’s earnings over time. Many ISA providers continue to argue that their products are not loans even though they lend money and subsequently require repayment, employing an old and predatory tactic that loan providers use to evade consumer protection guardrails. In fact, ISAs are simply high-cost loans that currently lack even the protections afforded to private student loans, which themselves are a worse option than federal student loans for most borrowers. The high cost of ISAs...

CFPB Should Treat 'Buy Now, Pay Later' Products Like Credit Cards and Protect Consumers from Harmful Practices.

In response to the Request for Comments issued by the Consumer Financial Protection Bureau, the Center for Responsible Lending, the Consumer Federation of America, and the National Consumer Law Center (on behalf of its low-income clients) offer joint recommendations for further guidance and monitoring of the growing Buy-Now-Pay-Later market overall, which are specific to the "pay-in-four" model. Our comment covers substantial background of the BNPL market; considerations based on current consumer protection laws, and concerns we hope the Bureau, within its authority, will address.

77 Groups Urge the CFPB to Supervise the 'Buy Now, Pay Later' Market

The group letter begins: The undersigned 77 consumer, housing, civil rights, legal services, faith, community, small business, student borrower, and public interest organizations appreciate the opportunity to comment on the CFPB’s inquiry into Buy Now, Pay Later (BNPL) credit products that are proliferating across market areas. We welcome the CFPB’s recent inquiry into Affirm, Afterpay, Klarna, PayPal, and Zip, however we remain alarmed by the lack of regulation of this exploding consumer credit product market. We urge the CFPB to view BNPL products as credit cards covered by the Truth in...

APR Matters: Allows True Comparison; Reveals Astronomical Cost of Payday Loans

Payday lenders often describe the cost of their loans in terms of fees or simple interest rates. Responsible lenders readily disclose the APR on their loans, aligned with the Truth in Lending Act (TILA). They are not afraid to let their customers compare the costs of their loans to other loans in the market. Tellingly, payday lenders often object to having to disclose the APR of their loans. Why APR Matters Payday lenders do not like disclosing APR for two reasons. One, it allows a true comparison of the cost with other forms of credit, even those that are short-term like a credit card advance...

Amicus Brief: North Carolina Supreme Court - Townes v. Portfolio Recovery Associates (PRA)

The Center for Responsible Lending, Legal Aid of North Carolina, North Carolina Justice Center, National Association of Consumer Advocates, Charlotte Center for Legal Advocacy, Financial Protection Law Center and Pisgah Legal Services partnered to filed this amicus brief in the North Carolina Supreme Court in Townes v. Portfolio Recovery Associates (PRA). Townes v. PRA is principally about the interpretation of CEPA, NC’s consumer protection statute, and its requirement that debt buyers to produce “itemized accounting” of alleged debts. Plaintiff Ms. Townes is advocating for a bare minimum...

Protect Against Abusive Debt Collection: Working Families Need Wage Protection and a Chance to Save

Debt collectors, including debt buyers, have weaponized the courts and frequently sue the wrong consumer for the wrong amount. Armed with a judgment, they use wage garnishment orders and bank account levies to seize money from families who are the least able to afford it. Research shows that nearly half of all Americans do not have enough savings to cover three to six months’ worth of living expenses, yet that is what people need to ensure that they can provide for their families. CRL is calling on the federal government to protect $12,000 in people’s bank accounts from being levied, per adult...

Credit Bureaus Must Take Action To Correct Credit Report Problems for Transgender and Nonbinary Consumers

145 organizations sent a letter to the “Big Three” credit bureaus (Equifax, Experian, and Transunion) and to the Consumer Data Industry Association (CDIA), the trade association that represents them, urging them to take needed actions to correct credit report problems for transgender and nonbinary consumers.

Coalition Urges SBA and Congress to Fix PPP Forgiveness Rules Unfairly Penalizing Microbusinesses

CRL and more than 50 community development, civil rights and small business groups, including National Urban League, National Association for Latino Community Asset Builders, UnidosUS and National Coalition for Asian Pacific American Community Development are urging SBA and Congress to fix the Paycheck Protection Program’s current forgiveness rules so that microbusinesses can receive full forgiveness of their PPP loans. Urgent recommendations in the letter include: Eliminate denials of loan forgiveness due to sudden changes in rules that were imposed without advance notice, both for business...

One Door Closes & Others Remain: Institutional Loans and the 90/10 Formula

The “90/10 Rule” is meant to ensure that for-profit schools are, in fact, competitive in the marketplace and are not relying only on taxpayers to survive. In other words, the rule is based on the principle that a viable educational program should be funded in part by students or employers who are willing to pay cash to invest in career training for themselves or their employees, respectively. Although a small percentage of proprietary schools have failed the 90/10 test in recent years, between 11 and 20 percent of schools derive over 85 percent of their revenues from Title IV sources. Because...

Millions of Student Loan Borrowers Need Overdue Income-Driven Repayment (IDR) Reforms

Download the letter to Secretary Miguel Cardona from 104 organizations representing students, student loan borrowers, teachers, workers, civil rights, veterans, people of faith, and consumers urging him to deliver on the promise of income-driven repayment (IDR) programs for federal student loan borrowers through the creation of an IDR restoration project, or an IDR waiver.

FDIC Must Stop Banks from Fronting for Predatory Lenders

With a new chairman taking the helm of the Federal Deposit Insurance Corporation (FDIC), the Center for Responsible Lending joined with more than a dozen other organizations in calling for the FDIC to "stop permitting its supervised institutions to front for predatory lenders evading state interest rate limits."

Data Point: California Appeals Court Ruling Affirms Regulator’s Authority to Curb Bail Industry Abuses

In a precedent-setting ruling, the California Court of Appeals at the end of 2021 handed down a decision affirming a broad preliminary injunction against a bail bond company called Bad Boys Bail Bonds. The court prohibited the company from collecting on $38 million in debt from cosigners who borrowed money to gain pre-trial release for their loved ones. The order, which stemmed from a historic class action lawsuit filed in 2019 by the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area and Keker, Van Nest and Peters LLP on behalf of cosigners, says bail companies must follow...
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