CRL in the News

By law, the CFPB doesn’t have the authority to cap interest rates, but states do. According to the Center for Responsible Lending, 19 states and the District of Columbia have done so — usually imposing a limit of 36% APR. The federal Military Lending Act has long capped the annual interest charged on payday loans for military members and their families at 36%.

A 2024 study from the Center for Responsible Lending found a 56 percent increase in overdrafts from users’ checking accounts after an initial advance, as companies tried to collect their money. “If you have insufficient funds in your bank account, [these companies] will attempt to collect repayment on multiple occasions, so you could end up receiving multiple overdraft fees as they attempt to claw back their payment,” Lucia Constantine, co-author of the study, told The Lever. The study also found that companies seeking tips from their users often set the default tip amount above $0 and claim

By the numbers: In a study published this year, the Center for Responsible Lending found the average APR on pay advances repaid in 7 to 14 days was 367% (compared with 400% for a typical payday loan).

A June report from The Center for Responsible Lending — a nonprofit that opposes high-interest lending — found that the average interest rate for Nevada payday loans was 548 percent, the fifth-highest rate in the country.

According to a 2023 report from the Center for Responsible Lending (CRL), 27 states across the country allow payday lending companies to issue single-payment loans with triple-digit interest rates. In recent years, five states have capped these rates, including conservative Nebraska, offering hope that more state legislatures across the country would do the same. But the payday lending industry has other ideas.

The Consumer Financial Protection Bureau (CFPB) proposed a rule to curb overdraft fees incurred when consumers withdraw more than the available funds in their bank account — a move that might save customers about $3.5 billion a year overall. It would limit those fees to only what’s necessary to cover the institutions’ costs, which is somewhere between $3 and $14, instead of the $35 some banks charged before the rule was announced. This is a “huge way in which the administration has shown up in a way that affects everyday consumers,” said Mitria Wilson-Spotser, the federal policy director at

Anneliese Lederer, senior policy counsel at the Center for Responsible Lending, said it’s crucial for homeowners considering the UWM loan program to be educated about the terms and conditions. “Using fun lines like ‘no-down payment’ sounds exciting and great. But you need to read the fine print,” Lederer said. “This could be a fantastic product to allow people who can afford the mortgage payment but don’t have the down payment to access homeownership. But the question is: How do you pay off that second mortgage? What is the plan? Right now there is no plan.”

“The aspect of this program that makes me nervous is the silent second mortgage,” Anneliese Lederer, senior policy counsel at the nonprofit Center for Responsible Lending, told MarketWatch in an interview. “It’s great that there’s no interest on it, but it’s a balloon payment, and borrowers need to understand what a balloon payment is.”

Many of Buy Now, Pay Later’s repeat customers are financially vulnerable to begin with, says Nadine Chabrier with the Center for Responsible Lending. “Users tend to be younger. They tend to be Black, Latino, consumers of color,” she said. Chabrier said many have lower annual incomes and a high risk of becoming overextended.

Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending, said the decision allows the CFPB “to keep doing its job as a watchdog agency that protects Americans’ wallets from predatory financial firms.” “Even with this decision, we must keep fighting to defend our consumer watchdog agency in the courts and in Congress as some industry actors sue and lobby to preserve illegal financial discrimination, billions in unlawful junk fees, and other exploitative behavior,” Chabrier said.