Research & Policy

A CRL study released in December 2006, revealed that millions of American households would lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. The "Losing Ground" study was the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006. CRL found that despite low...

Executive Summary: Financial Quicksand New CRL study finds borrowers pay $4.2 billion every year in excessive payday lending fees Every year, payday lenders strip $4.2 billion in excessive fees from Americans who think they're getting a two-week loan and end up trapped in debt. This report finds that across the nation payday borrowers are paying more in interest, at annual...

Committe: Senate Subcommittees on Housing & Transportation and Economic Policy

In a working paper released last month, Morgan Rose, a researcher from the OCC, analyzes a set of subprime loans originated in Chicago to determine the impact of selected lending terms on the likelihood of foreclosure. The study finds that loans with prepayment penalties and balloon payments are 22 to 117 percent more likely to foreclose than those without such...

A Georgia statute passed in May 2004 imposes stiff penalties for payday lending by non-banks and in-state banks, and is the first state law to expressly prohibit payday lenders from contriving with out-of-state banks to evade state usury limits. Soon after its enactment, several payday lenders and their bank "partners" sued the state seeking a court ruling that the Act...

Committe: House Subcommittee on Financial Institutions and Consumer Credit

African-Americansand Latinos get high-priced subprimemortgages far more frequently than whites -- even when they are equally qualified, according to a groundbreaking new study from CRL. Lenders say they charge more because African-Americans and Latinos on average have shakier credit histories, which makes lending to them riskier. But that explanation is simply wrong. In the most extensive study of its kind...

VULNERABLE CONSUMERS CAUGHT IN OVERDRAFT CYCLE CRL has conducted a survey of overdraft loan customers. Our findings suggest that: * Sixteen percent of overdraft loan users account for 71 percent of fee-based overdraft loan fees. *Repeat users are more often low-income, single, non-white renters. * Repeat users are in effect using the overdraft loans as an expensive substitute for a...

In a new working paper "Call Protection in Mortgage Contracts" Michael LaCour-Little concludes that prepayment penalties reduce the cost of credit to borrowers. However, there are several shortcomings in his analysis: inadequate data, inconsistent results, and neglect of the negative effects of prepayment penalties.

The Center for Responsible Lending has released the most comprehensive study ever conducted on state laws aimed against predatory lending. "The Best Value in the Subprime Market: State Predatory Lending Reforms" shows that state laws are working well for credit-strapped families in the subprime market and for responsible lenders. With strong state laws, homeowners get these advantages: Stronger protections with...

On March 1, 2006, Attorney General Roy Cooper announced that the last three major out-of-state payday lenders had agreed to stop making illegal loans in North Carolina. As a result, working families in the state will save almost $100 million each year -- money they can use to buy food, pay their bills, and balance their family budget. Related Resources...

To find a model for national legislation, many lawmakers need look no further than their own backyards. People who live in states with strong laws against predatory lending are more likely to get responsible mortgages at a lower cost. Our findings show that state laws enacted to prevent predatory mortgage lending work as intended to reduce abusive loan terms without...

A report released by the Tennessee Department of Financial Institutions on February 1, 2006 reveals that Tennessee's title lending industry has taken thousands of borrowers' cars after charging borrowers sky-high rates. Findings from the report include the following: High Rates. Some Tennessee lenders charged as much as 30% per month for title loans, substantially more than the 22% per month...

Payday industry tries to discredit CRL research... again Industry dollars funded supposed academic research A front group for the payday lending industry paid a college professor, Thomas Lehman, to write a pro-payday research report last year. The front group is Consumer Credit Research Foundation (CCRF), whose public relations director told BusinessWeek that CCRF is funded by the payday lending industry...