Research & Policy

Ten years after the Great Recession, the current economic contraction is again hitting Black and Brown communities and lower-wage workers the hardest – many of whom have never recovered. This crisis is worsening long-standing and growing racial and economic inequities at the very moment of national reckoning with the historic need for their redress. Too often, predatory financial services and products prevent families and small businesses from accessing opportunities and instead impede their ability to reduce poverty and close the racial wealth gap. Bold action to curb predatory lending and...

The undersigned consumer, civil rights, and housing organizations welcome the CDFI Fund (Fund)’s efforts to more vigorously ensure that the primary mission of any CDFI is to promote community development. CDFIs are uniquely suited to promote community development and expand financial inclusion. At times, however, we see CDFIs use “financial inclusion” as the central purported justification for permitting irresponsible lending practices, unreasonably high interest rates, and erosion of longstanding consumer protections. Download the full comment to continue reading.

The Center for Responsible Lending, Self-Help Credit Union, Self-Help Federal Credit Union, and Self-Help Ventures Fund welcome the CDFI Fund’s efforts to more vigorously ensure that the primary mission of any CDFI is to promote community development. To that end, we urge the Fund to establish lending standards that function as clear, bright-line eligibility requirements for CDFI certification or renewal: A fee-inclusive annual percentage rate (APR) limit of 36%, computed consistent with the current Military Lending Act regulations (or lower if required by state law);1 and For any mortgages...

In 2008, Ohio voters affirmed capping the cost of payday loans in the state at 28% interest; however, payday and car-title lenders engaged in schemes to evade the voter-mandated cap, trapping consumers in a cycle of debt with APRs of over 500%. In 2018, Ohio lawmakers approved some restrictions on these lending schemes, but even with these 2018 changes, payday lenders in Ohio are still charging over 100% APR and are not subject to requirements that ensure the loans can be repaid. Ohioans want real reform that has been proven to stop the debt trap—a rate cap of 36% or lower that includes fees...

In the fall of 2017, after more than five years of outreach and research, the Consumer Financial Protection Bureau (CFPB) issued a regulation to address harms to consumers caused by payday loans, vehicle-title loans, and certain other loans with similar features. In July 2020, the CFPB issued a new rule that repeals core aspects of the 2017 rule. Payday and title loans are short-term loans that lenders typically offer without assessing borrowers’ ability to repay. Lenders’ failure to underwrite traps many borrowers in expensive cycles of unaffordable debt. Financially distressed consumers are...

Opportunity in America has never been evenly distributed, but the gains made over the last 100 years are at risk if a conservative Justice is added to the Supreme Court. Just like the many social issues already being covered in the wake of President Trump’s Supreme Court nomination, the nine justices who fill the seats of America’s highest court will profoundly impact the daily financial lives and futures of hardworking families. In addition to healthcare access, reproductive rights, and many other issues, over the next several years the Supreme Court will make important and lasting decisions...

Over the past 50 years, wage stagnation, as well as already high and rising housing, health care, and education costs have dramatically increased debt loads for the average family. Moreover, recovery from the Great Recession has been uneven. Data show that families of color, Americans born after 1970, and households earning less than $60,000 annually are the least likely to have recovered the wealth they lost in the financial crisis.2 And now, the COVID-19 health and economic crisis has laid bare existing inequities and will perpetuate these families’ economic struggles. Before the crisis...

From the introduction to the comment to the Federal Housing Finance Agency: On behalf of the undersigned consumer, civil rights, and housing organizations, we would like to thank you for the opportunity to comment on the affordable housing goals for Fannie Mae and Freddie Mac (the GSEs). In exchange for government support, the GSEs have an explicit public interest mission. This mission is foundational and part of their charters – the GSEs’ very reason for existing. The mission includes promoting access to mortgage credit to underserved borrowers, serving a countercyclical role in the mortgage...

Ten years after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, with the country again facing an economic crisis, new polling data from Lake Research Partners, commissioned by the Center for Responsible Lending and Americans for Financial Reform shows that voters across all political parties are broadly and intensely supportive of strong consumer financial protections and of tough regulation of the financial services industry. Download the: Polling memo Toplines Time series

Prior to the COVID-19 crisis, court fines and fees, and other monetary sanctions overly burdened young people and adults involved in the criminal legal system with debt from pre-trial through post-release and beyond. A few months into the crisis, we are seeing that Black and Brown communities are disproportionately facing economic challenges. This is reflected in national unemployment data, where May 2020 unemployment rates were 24.3% and 25% for Black and Hispanic workers, respectively, compared to 16.1% for White workers. Due to over-policing and over-incarceration, these same communities...

From the comment to the CDFI Fund on the Small Dollar Loan Program: The Center for Responsible Lending (CRL), National Consumer Law Center (on behalf of its low income clients) (NCLC), NAACP, Americans for Financial Reform Education Fund, Consumer Federation of America, and Public Citizen appreciate the opportunity to comment on the CDFI Fund (Fund) Small Dollar Loan Program (SDLP). We support efforts to promote affordable and responsible small dollar loan programs but urge that any funding be tied to strict criteria in order to exclude high-cost loans or loans with high-risk features...

From the full comment: Thank you for the opportunity to comment on the Consumer Financial Protection Bureau’s (CFPB’s) qualified mortgage (QM) proposed rule. Given CFPB’s decision to end the GSE patch, we believe that a price-based approach is an appropriate and effective method to determine QM status. However, additional safeguards are necessary to ensure that the final rule effectively protects consumers and promotes access to responsible mortgage credit. In finalizing its rule, CFPB should ensure borrower protections for four key issues: fair lending, pricing caps, short-reset adjustable...

In a September 3 letter to Acting Comptroller of the Currency, Brian Brooks, the Coalition for Responsible Lending wrote: We oppose the OCC’s proposed rule to permit lenders to use the rent-a-bank model to avoid North Carolina’s rigorously enforced interest rate cap. The OCC’s proposed rule will let predatory lenders off the hook for charging interest and fees in excess of what is legally allowed in our state. This rule, if implemented, will bring back the harms associated with predatory lending and limit our state’s ability to protect our consumers from those harms. This rule will not offer...

More than 100 community, consumer, civil rights, and faith organizations wrote to vigorously oppose the OCC’s proposed rule to gut the longstanding "true lender" anti-evasion doctrine. The proposed rule would trample state interest rate limits and unleash predatory lending in all 50 states, further exacerbating the economic impacts already experienced by COVID-19.

From the comment to the Office of the Comptroller of the Currency, Notice of Proposed Rulemaking, "National Banks and Federal Savings Associations as Lenders": We, the consumer and civil rights groups named above, write to strongly oppose the Office of the Comptroller of the Currency’s (OCC) proposed rule preempting the authority of states and courts to look beyond contrivances to the truth to prevent evasions of state usury laws. The proposal would eliminate state interest rate limits for nonbank predatory lenders in every state as long as a bank’s name is in the fine print – nothing more –...

In a September 3 letter to Acting Comptroller of the Currency, Brian Brooks, the Californians for Economic Justice Coalition wrote: California has strong interest rate caps on installment loans intended to protect our residents from predatory loans. Understanding that products like payday loans, car-title loans, and high-cost installment loans at sky high interest rates are merely debt traps for borrowers, consumer advocates, community and faith-based organizations, and veterans groups worked closely with legislators and lending industry representatives to reach a final compromise that would...

Introduction and Executive Summary Thank you for the opportunity to comment on the Federal Housing Finance Agency’s (FHFA’s) re-proposed rule on capital requirements for Fannie Mae and Freddie Mac (the governmentsponsored enterprises, or GSEs). In our view, the proposed rule erroneously treats the GSEs as banks and therefore requires banklike capital. This leads to gratuitously high capital levels that run directly contrary to the GSEs’ charter mission to promote access to mortgage credit to underserved borrowers, to serve a countercyclical role in the mortgage market, and to FHFA’s duty to...

The Consumer Financial Protection Bureau (CFPB), under Director Kathy Kraninger, gutted a 2017 CFPB rule aimed at stopping the debt trap caused by payday and car title loans. This action will have a harmful impact on American consumers and their families, including a disproportionate number of people of color. Download the one-pager to learn more.

For years, predatory lenders have sought ways to avoid state interest rate limits. One scheme has been the “rent-a-bank” scheme. Under this scheme, a non-bank lender finds a bank willing to be the nominal originator of the non-bank lender’s high-cost loan, because banks are generally exempted from complying with state interest rate laws. State regulators, state attorneys general, and consumers have had success in the courts stopping these schemes based on a legal doctrine referred to as the “true lender” doctrine, and there are only a handful of rent-abank schemes underway today. But the OCC...

The undersigned consumer and civil rights organizations appreciate the opportunity to submit comments on the Consumer Financial Protection Bureau’s (CFPB or Bureau) 2020 Supplemental Notice of Proposed Rulemaking (supplemental proposed rule) on debt collection. As organizations dedicated to eliminating abusive financial practices – particularly focused on communities of color and low- to moderate-income consumers – we are deeply concerned about the supplemental proposed rule’s content and impact. The Bureau proposes in its supplemental proposed rule that collectors would be permitted to...

From the amicus brief: This case concerns the authority of the Office of the Comptroller of the Currency (OCC) to extend the privileges of national banks to entities that do not accept deposits and are not banks in any traditional or legal sense. The foremost reason why non-banks will seek out a “special purpose national bank” is to take advantage of preemption of state consumer protection laws, particularly interest rate caps. High-cost predatory lenders are eager to evade state laws that limit them from charging usurious rates.

We support the CFPB’s decision to conduct additional testing of the validation notice it has proposed and agree that such research is a necessary part of the Bureau’s debt collection rulemaking. As discussed below, we believe that the utility of the research will depend upon: the criteria used to select individuals to participate in the research; and the scope of the issues that are probed through the research. This comment is thus offered to address ways to “enhance the quality, utility, and clarity of the information to be collected.” Download the full comment.

Download the sign-on letter from the 101 undersigned community, civil rights, consumer, and student advocacy organizations insisting on student debt cancellation for all borrowers during negotiations over the next coronavirus relief package.

Download the full letter from Wells Fargo's Michael DeVito, EVP of Head of Home Lending, to the U.S. Department of Housing and Urban Development regarding the Fair Housing Act Disparate Impact Rule.

Industrial loan companies (ILCs) or industrial banks (IBs) (together, “ ILCs”) typically enjoy the privileges of traditional banks but pose two significant risk factors unique to ILCs: They are not subject to the Federal Reserve’s supervision, which occurs at the consolidated level (i.e., the ILC’s parent company, the ILC, and their affiliates); and They permit the intermingling of commercial and financial activity, prohibited for traditional banks. In light of these concerns, the FDIC did not permit any new ILCs for over a decade, until March of this year, when it approved two. Now, the FDIC...