Research & Policy

CRL supports the principles laid out in the OCC's proposed guidance on overdraft and bank payday loans, but hopes the OCC will dramatically strengthen its guidance to address existing problems and to avoid inadverdently entrenching abuses. Among our recommendations, CRL urges the OCC to act quickly and decisively to stop payday lending before it becomes pervasive among banks. CRL also urges the agency to stop its banks from posting transactions in order from highest to lowest to increase overdraft fees.

Consumer groups fear OCC proposed guidance may legitimize and facilitate the spread of payday lending by national banks, and banks would continue abusive overdraft practices—harming bank customers, undermining state payday loan laws, and weakening the long-term safety and soundness of financial institutions.

Federal regulators are proposing to mandate down payments as high as 20% on future home loans, but even a 10% down payment requirement would stifle economic recovery and lock out responsible home buyers. How Many Years Would it Take These Workers to Save for a 10% Down Payment? Graph: Years to save for 10% down payment by 10 common occupations (PDF) Graph: Years to save for 10% down payment by race and ethnicity (PDF) The housing market of the future can drive economic growth without shutting out responsible home buyers.

The mortgage market of the future can drive economic growth without shutting out responsible home buyers. Here is an overview of CRL's recommendations to regulators: The Agencies should delay finalizing the QRM rule until after the final QM rule has beenissued. The QRM final rule should be harmonized with the QM final rule to facilitate compliance. QRM loans should meet all QM requirements. Just as the QM requirements will not, and should not, include down-payment or LTV, neither should the QRM requirements. The point is not that down-payments should not be required, but rather that they...

In its first formal comment to the CFPB, the Center for Responsible Lending supports new Dodd-Frank mortgage reforms and urges the CFPB to ensure that lenders have appropriate consequences if they fail to abide by the rules.

In its first formal comment to the CFPB, the Center for Responsible Lending supports new Dodd-Frank mortgage reforms and urges the CFPB to ensure that lenders have appropriate consequences if they fail to abide by the rules.

A new CRL report describes how banks are adding payday loans to their arsenal of predatory loan products. These loans drain cash from cash-strapped Americans, often social security recipients. The banks are making loans to their checking account customers based on the customer's direct deposit paycheck. The fees are high and the entire principal is deducted on payday, which, like payday lending, forces most customers into a long-term cycle of borrowing that systematically strips them of their funds. The report finds: Bank payday loans are very expensive, carrying an annual percentage rate (APR...

Download our analysis A new poll shows that American voters broadly support the 2010 Dodd-Frank Wall Street Reform law. The poll--conducted by Lake Research Partners for CRL, AARP, and Americans for Financial Reform--reveals that voters overwhelmingly support the Consumer Finance Protection Bureau and its specific functions. Learn more about CFPB Some key findings from this poll: Likely voters, including majorities of Independents, Democrats, and Republicans, favor the 2010 Dodd-Frank Wall Street Reform law by a 5 to 1 margin (71% vs. 14%). Presented with information about challenges in...

Unsustainable lending pushed us into the financial crisis, and sustainable lending and responsible consumer financial services products are needed to restore and maintain economic health. An independent Consumer Financial Protection Bureau (CFPB), as enacted by the Dodd-Frank Act (DFA or Dodd-Frank), is critical to reestablishing these sustainable lending practices.

Download our analysis A new poll shows that American voters broadly support the 2010 Dodd-Frank Wall Street Reform law. The poll--conducted by Lake Research Partners for CRL, AARP, and Americans for Financial Reform--reveals that voters overwhelmingly support the Consumer Finance Protection Bureau and its specific functions. Learn more about CFPB Some key findings from this poll: Likely voters, including majorities of Independents, Democrats, and Republicans, favor the 2010 Dodd-Frank Wall Street Reform law by a 5 to 1 margin (71% vs. 14%). Presented with information about challenges in...

Unsustainable lending pushed us into the financial crisis, and sustainable lending and responsible consumer financial services products are needed to restore and maintain economic health. An independent Consumer Financial Protection Bureau (CFPB), as enacted by the Dodd-Frank Act (DFA or Dodd-Frank), is critical to reestablishing these sustainable lending practices.

On July 21, the CFPB will be a cop on the beat to enforce the laws on credit cards, mortgages, student loans, prepaid cards, and other kinds of financial products and services. This report from the Bureau summarizes in one place what they've been up to.

Mortgages servicers should be required to give every mortgage holder "a good-faith review of foreclosure alternatives" before taking steps to take his or her home, CRL president Michael Calhoun told Congress today. In testimony before the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit and Subcommittee on Oversight and Investigations, he recommended that servicers be required to do the following: exhaust alternatives before starting foreclosure proceedings disclose the numbers they use to calculate whether a mortgage holder qualifies for a loan...

CRL joins several groups in opposing proposed rules that would continue the OCC's broad preemption of state laws governing mortgages, credit cards, bank accounts and other banking products.

The Coalition for Sensible Housing Policy, including CRL, issued this paper to make the case for sound mortgage lending practices -- but not mandated down payments that would bar responsible home buyers from ownership. Learn about Qualified Residential Mortgage (QRM) proposals.

Better Overdraft Policies Put Money Back In Consumers' Pockets Regulators Must Stop Remaining Overdraft Abuses A new study by Market Rates Insight finds that Americans saved $1.6 billion in overdraft fees in 2010 after the "opt-in" rule took effect last summer. Once banks were required to get explicit permission before approving debit card overdrafts for a fee, most Americans said, "No, thanks." Since then, even during these tough economic times, customers' account balances have increased, while service fees have decreased. Unfortunately, abusive overdraft practices that cost tens of billions...

Federal regulators are proposing to mandate down payment requirements up to 20% on future home loans. Their proposal is part of the proposed standards for defining a " Qualified Residential Mortgage," or QRM. This brief updates and supplements "Don't Mandate Large Down Payments on Home Loans," published by CRL in March 2011. [1] Our analysis shows that a 10% down payment on QRM loans would make homeownership out of reach for many average American families—even creditworthy families with a stable income and steady savings. As shown in the chart below, a family with median income would need to...

Read the full, original report or executive summary from February 2011. Watch our 4.5 minute video of Senior Researcher Josh Frank discussing the findings. Updated CARD Act Research (June 2011): Clearer Pricing Not Raising Rates CRL's research shows that the Credit CARD Act of 2009 has reversed much of the unclear pricing on credit cards, without leading to higher rates or more difficulty in getting credit. These findings refute claims made by opponents of the credit card reforms. "People mistake higher rates on mail solicitations and other offers in the last year as a price hike," said CRL...

Why Did We Oppose HB 810? Read entire bill >> Read our summary of the bill >> What's happened with HB 810? >> Rates on small loans in NC are already too high. With families struggling, making these loans more expensive will be a disaster for NC consumers. 25 to 54% interest is enough. Consumer finance companies can already charge up to 54% annual interest on the smallest of these loans. They can also charge about 25% annual interest on loans up to $10,000. This is more than enough. The companies are profitable already. The NC Commissioner of Banks has studied this industry in depth and...

Read entire bill >> See our talking points >> What's happened with HB 810? >> The Consumer Finance Act lets non-bank lenders make small loans of $10,000 or less. The current law creates two tiers of lenders: "53-173" lenders who can make loans up to $3000 and "53-176" lenders who can make loans up to $10,000. If HB 810 had passed, it would have: Increased the Loan Size Increased the maximum loan size from $10,000 to 15,000. Increased the Interest Charged on Loans Read the entire bill Under Section 173 (for loans up to $3000) Would have allowed 36% interest on loans up to $1500. Current law...

More Information: Summary of HB 810 Text of HB 810 Why Oppose HB 810? Background on Consumer Finance Loans in NC Who Opposes HB 810 ? How Did Your Representative Vote on HB 810 in 2011? House Bill 810, after barely passing the House in 2011, died in the Senate Rules Committee in 2012. And, for the first time in five years, there is no study commission appointed to "study" this industry. HB 810 would have significantly increased the rates and fees that consumer finance companies can charge on installment loans0. CRL estimates that this bill would have cost NC borrowers $50-70 million per year...

Chief Consumer Watchdog arrives in 2012 President Obama names former Ohio Attorney General as CFPB Director America's consumers now have a top cop in a wide range of financial affairs. Richard Cordray, a former Ohio attorney general and state treasurer was appointed by President Obama to become the first director of the Consumer Financial Protection Bureau (CFPB). After the greatest financial collapse since that of the 1930s Great Depression, the historic Dodd-Frank Act created a new bureau to comprehensively address lending abuses and the accompanying power to enforce regulatory change...

CRL and the National Consumer Law Center filed an amicus brief supporting appellant Donna Epps in regards to the improper repossession of the appellant's vehicle.

Survey finds low opt-in rate, high number of misperceptions Download the complete survey (PDF) >> When it came to convincing customers to opt in to high-cost overdraft coverage, it was as if the banks rigged the election but still lost the vote. A Center for Responsible Lending survey indicates that most consumers do not want high-cost overdraft coverage for their checking accounts, and that opt-ins are largely based on aggressive and misleading marketing, rather than clear and accurate information from banks. Many banks routinely cover any transaction that overdraws a customer's account...

Rate Markups Cost Americans $25.8 Billion Over the Lives of Their Loans Download the Full Report (PDF) >> Download the Executive Summary (PDF) >> Rate Markup Volume Per State (Web Page) >> Costly Service The average dealer rate markup is $714 per loan. Learn what that may mean to a consumer's pocketbook. Cars are the most common nonfinancial assets held by Americans. For most families, owning a car is not merely a luxury, but a prerequisite to opportunity.Cars not only provide transportation, but also options for where to work and live, and how we all interact with our communities.As a result...