CRL in the News
The Center for Responsible Lending estimates that payday and car-title lenders rake in about $8 billion a year in combined fees from beleaguered borrowers.
Clearly there’s a role for short-term loans in uncertain economic times. The CFPB’s rules were intended to prevent people from falling into inescapable debt traps.
Debbie Goldstein, executive vice president at the Center for Responsible Lending: So I think this is shocking and disappointing but maybe not surprising…. However, what the CFPB's intent was was to set up a reasonable cushion for reserves for unexpected expenses, just like any of us might do to make sure we have enough for our expenses.
Rebecca Borné, Senior Policy Counsel at the Center for Responsible Lending (CRL) blasted the move, saying payday loans with triple digit interest rates need stronger regulation.
"For more than five years, the Consumer Financial Protection Bureau studied the issue, welcomed public input, and crafted a rule to help stop the payday loan debt trap," Borné said in a statement to ConsumerAffairs.
Last year, the Obama administration enacted new rules regarding payday lending. They haven't yet come into effect. Now, the Consumer Financial Protection Board says it will reconsider the tighter regulation that would have required payday lenders to make sure the people they lend to can actually repay their loans. The rule was bitterly opposed by some in the lending industry who say it would cut off credit to potential borrowers. Many consumer advocates, however, said the rule would have prevented people from being taken advantage of.
“Today’s announcement is a big deal and could become a terrible deal for consumers,” said Rebecca Borné, senior policy counsel at the Center for Responsible Lending. “The human devastation caused by payday loans, which average nearly 400 percent APR, has been extensively documented.”
"In every state, across the board, for-profit colleges are underperforming non-profit and that their demographics are different. Students who are attending for-profit colleges look different."
Some consumer groups disagree. “Considering the success the CFPB has had in fighting for consumers, it is troubling that H.R. 1264 would essentially exempt a large part of the banking industry from the CFPB’s supervision,” Scott Astrada, director of federal advocacy for the Center for Responsible Lending, told a House subcommittee last week, in testimony opposing the bill.
“Another area where there could be a big change is the consumer complaint database,” said Melissa Stegman, senior policy counsel at the Center for Responsible Lending. Nearly 1 million complaints processed by the agency are published on its website – minus people’s names and identifying information – as a resource for consumers and researchers on corporate practices.
Mike Calhoun, president of the Center for Responsible Lending, called Mulvaney’s appointment “unlawful.”
“Leandra English is the rightful Acting Director of the Bureau,” Calhoun said. “Naming Mick Mulvaney — someone who’s adamantly anti-consumer — rewards financial predators and fails to put consumers first.”
Even without Cordray at the helm, the problem that confronts Hunt and his frenemies running other financial industry trade associations is that the CFPB is simply too popular to eliminate. A 2017 poll by Americans for Financial Reform and the Center for Responsible Lending showed that 78 percent of likely voters believe we need tough rules and enforcement to prevent another financial crisis.