Research

For more than a decade, payday loans, car-title loans, and high-cost installment loans in South Dakota have carried charges exceeding 300% annual percentage rate (APR). In 2016, South Dakotans approved lowering the cost of payday loans, car-title loans, and installment loans to an annual interest rate cap of 36%, inclusive of all fees and charges. The vote in favor of the rate cap was overwhelming. In policy discussions about highcost small dollar lending, one of the most frequently asked questions is: what happens when a state enacts a rate cap? This paper seeks to add to this body of...

A few high-cost lenders are evading state consumer protections through rent-a-bank schemes. Through these sham arrangements, these companies are exploding right through the interest rate limits that most states have put in place for good reason, to protect people from high-cost debt traps that drain them of their hard-earned income. In the following states, payday lenders are using banks, which aren’t generally subject to state interest rate caps, to make usurious loans that exceed the state’s rate cap. The banks engaging in these schemes are abusing their charters and enabling predatory loans...

Download a table of state student loan servicing laws from the report. (Updated September 2022) Today, 44 million Americans are saddled with student loan debt. They currently owe over $1.5 trillion—an amount which has more than doubled over the last decade. The causes of this exploding debt burden are many: increasing tuition, stagnant wages, the shifting role of federal government in student lending, divestment from higher education, and the growth in predatory for-profit colleges. Poor servicing practices, particularly placing borrowers in consecutive forbearances instead of appropriate...

Democratic primary voters in the states of Iowa, New Hampshire, Nevada, and South Carolina strongly support a tough approach to oversight of Wall Street, according to a new poll conducted by Lake Research Partners and Chesapeake Beach Consulting. Democrats and independents, and even many Republicans share the views of this crucial set of voters. Americans see the need for strong regulation of the financial services industry, tough enforcement of existing rules, and additional measures, even after hearing opposing arguments that stress a danger in the role of government. And they strongly...

Strong majorities across political parties show concern about the level of student debt in the United States and oppose the Department of Education’s (ED) and the Consumer Financial Protection Bureau's (CFPB) recent actions to weaken protections for students, according to a new poll released by Americans for Financial Reform (AFR) and the Center for Responsible Lending (CRL). The poll was conducted by the bipartisan team of Lake Research Partners and Chesapeake Beach Consulting. Key polling concerns on student loan debt crisis: Across parties, a majority of voters agree that the amount of...

Download this factsheet for more information on the top three principles against rent-a-bank arrangements: Long Precedent Against Rent-A-Bank Schemes Has Served Banks and Consumers Well. More Recent Rent-a-Bank Arrangements (with FDIC-supervised banks) Include Grossly Irresponsible Loans. Change in Course Would Invite Risk, Backlash, and Erosion of Confidence in Banking System.

Earlier this year, the Consumer Financial Protection Bureau proposed new rules for debt collectors. The proposal authorizes, for the first time, a specific number of communication attempts to collect past-due debts. The rules also authorizes new means of communicating with people to collect debts, such as email and direct messaging, and expands the ability to collect time-barred debt. Download the polling memo. (PDF) Take Action: Urge the CFPB to protect consumers, not abusive debt collectors

While pursuing higher education is still a pathway to higher incomes over a person’s lifetime, student loan debt threatens to undermine this promise in North Carolina and nationwide. Outstanding student loan amounts have risen at an alarming rate over the past decade, and North Carolina has not been immune from this trend. Today, students and their families face a difficult decision: take on substantial debt to fill the gap between ballooning college costs and reduced grant support or forgo a college education in the face of a labor market that increasingly demands credentials and degrees. The...

Higher education has long been considered a pathway for advancement in our country. However, the playing field has not been level for low- and moderate-income families and people of color in their pursuit of a postsecondary education. Sadly, the resulting disparities in educational outcomes contribute to the persistent and growing racial wealth and income gaps. Nationwide, trends in the higher education landscape such as state disinvestment, rising college costs, the increasing necessity of college degrees in the labor market, and the loss of savings and other forms of wealth from the Great...

In the Dodd-Frank Act, Congress required lenders to make a reasonable and good faith determination that the borrower has the ability to repay a mortgage loan (ATR) before the loan is made. It also created a category of loans, called Qualified Mortgages, or QM, that are presumed to comply with the ATR requirement given product and borrower credit characteristics that make the loans lower risk. The product protections for a loan to be considered a QM are outlined in the Act, and the credit characteristics are left to the Consumer Financial Protection Bureau (CFPB) to determine. In setting the...