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Press Releases

September 18, 2007
In a powerful move to protect Washington, DC citizens from predatory payday lenders, the District of Columbia Council removed an exemption from the District's 24 percent cap on annual interest for consumer loans today. The vote is likely to encourage other states to pass interest rate caps to stop predatory payday lending—industry-supported measures have failed to control loan flipping in states where a usury cap is not enforced. The Council vote reversed an exemption passed in 1998, which allowed payday lenders to charge interest rates of 350 to 550 percent and authorized their...
September 12, 2007
Today the Federal Reserve Board issued a bulletin with its preliminary report on 2006 data reported under the Home Mortgage Disclosure Act (HMDA). We have not yet conducted a full analysis of the Board's report, but an initial review finds that, once again, African American and Latino families receive a disproportionate share of higher-cost, subprime home loans. "Higher-cost" loans have propelled the current foreclosure crisis, which has revealed that lenders have made subprime loans far too often with reckless disregard for affordability, while packing these loans with exploding...
September 6, 2007
Predatory lenders could easily tweak their loan terms to dodge new Pentagon rules released Friday, said national consumer advocates. By narrowly defining problem loans, the Pentagon's final rules of implementation weaken a federal law enacted to protect military families from abusive financial practices. "Perhaps unintentionally, the Pentagon has provided predatory lenders with a set of very specific instructions: 'How to avoid the cap and keep charging 400 percent interest,'" said Lauren Saunders, managing attorney with the National Consumer Law Center.The Military Lending Act passed by...
September 6, 2007
The 2nd Quarter National Delinquency Survey, released today by the Mortgage Bankers Association (MBA), shows that mortgage loans entering foreclosure have increased in 47 states since this time last year. On average, the increases were 50% higher. Only four states-- North Dakota, South Dakota, Utah and Wyoming—did not experience increases in new foreclosures. Less than two percent of the American population lives in those states. When releasing the survey today, the MBA downplayed new foreclosures by focusing only on changes between the last two quarters. "Any minor changes from one...
August 21, 2007
A coalition of California consumer organizations demanded stronger, swifter action on the part of the California legislature in response to the subprime mortgage crisis at a press conference in Sacramento today as well as in testimony before the Senate Banking Committee. The organizations, including California ACORN, the California Reinvestment Coalition (CRC), the Center for Responsible Lending (CRL), Consumer Federation of California (CFC) and Consumers Union recommended a number of policy changes that would both assist current borrowers in crisis and protect future subprime borrowers...
August 16, 2007
Durham NC -- As the disastrous consequences of reckless subprime lending continue to mount, North Carolina lawmakers are standing up for homeowners by making it tougher to offer abusive home loans. Earlier this month, the North Carolina Home Loan Protection Act (HB 1817) passed the State Senate 33-15 and the State House 113-0. Today Governor Mike Easley, a strong supporter of the bill, held a signing ceremony to usher in the new law, which offers stronger protections against dangerous subprime mortgages. The new law directly addresses the current subprime crisis, weeding out questionable...
July 24, 2007
The second quarter of 2007 featured California's highest foreclosure losses in nearly 20 years, according to DataQuick, the real estate information service based in La Jolla, Calif. Trustees Deeds recorded, which reflect actual home loss due to foreclosure, totaled 17,408 in the second quarter—the highest recorded number of home losses due to foreclosure since DataQuick began collecting data in 1988. "There can be no doubt that California is in the midst of a foreclosure crisis," said Paul Leonard, director of the California office of the Center for Responsible Lending (CRL). "...
July 11, 2007
U.S. banks and credit unions are using abusive overdraft loans to generate $17.5 billion in fees each year, according to a major new study, entitled "Out of Balance," from the nonprofit Center for Responsible Lending (CRL). The study finds that financial institutions are deliberately using overdraft systems that are designed to generate more overdrafts from customers, resulting in enormous fees for banks and credit unions. "Some of our largest financial institutions are hiding behind a smokescreen of misleading terms and murky practices that encourage costly overdrafts," said Eric Halperin...
June 29, 2007
Today federal financial regulators issued a key statement on subprime mortgage lending that applies to banks, subsidiaries and affiliates of banks, and credit unions. The statement requires these federally-regulated entities to take common-sense precautions before approving subprime home loans. This action by regulators represents an important first step toward bringing responsibility and integrity to the subprime market. The statement encourages better lending practices that will benefit homeowners in several ways. Notably, the guidance discourages lenders from assessing a borrower's...
June 29, 2007
The California legislature's subprime lending bill, SB 385 sponsored by Sen. Michael Machado (D-Linden) fails to protect consumers from dangers in the subprime market, the Center for Responsible Lending (CRL) said today. The legislation merely would require California's regulatory agencies to adopt federal guidelines covering certain "nontraditional" mortgage products that the same regulators have already published for comment and plan to finalize later this summer. The bill and the regulations do not cover the subprime products that have been the largest source of defaults and...

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