Press Releases

Yesterday, the U.S. House of Representatives passed H.R. 1210. The bill would exempt the nation’s largest banks from rules put in place in response to the economic crisis. Specifically, the bill would give legal protections to any bank that holds any mortgage loan in its portfolio. The bank would receive the legal protections even if it ignored certain best practice underwriting standards and charged the high fees and high interest rates associated with the predatory lending in the lead up to the 2008 financial crisis. In response to the vote, CRL president Mike Calhoun said: Congress seems to

Bill Creates Obstacles to Enforcing Fair Lending Laws The U.S. House of Representatives voted last night to pass H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act. The bill requires the Consumer Financial Protection Bureau to rescind its warning to lenders who provide auto loans through dealerships that certain practices risk violating fair lending laws. Auto dealers have discretion to raise the interest rate for which borrowers qualify and then keep some or all of the additional charges. This discretionary mark-up of interest rates has been shown to disproportionately impact

A new policy brief from the Center for Responsible Lending (CRL) shows that most consumers would pay lower interest rates if car dealers stopped getting paid through increases in the interest rate. According to industry data, as many as 70% of borrowers would pay a lower interest rate if the car lending industry shifted to a flat fee compensation model. Borrowers of color would likely see the most savings. Car dealers have the ability to increase the interest rate on car loans above that for which the borrower qualifies, and keeps some or all of the difference as compensation. Dealer interest

A key mortgage lending reform – which would be rolled back by a bill coming up for a vote in the House of Representatives next week – commands the support of an overwhelming majority of voters, according to a poll conducted this summer by Lake Research on behalf of Americans for Financial Reform and the Center for Responsible Lending. New regulations, developed in response to the reckless and deceptive lending practices that fueled the financial crisis of 2008-09, require mortgage lenders to verify a borrower’s ability to repay before making a loan. The “Portfolio Lending and Mortgage Access

Predatory Fees Drained from Ohio Have Doubled in Past 10 Years According to a new report released today by the Center for Responsible Lending, payday and car title loans continue to burden Ohioans with unaffordable, triple-digit interest rate debt, draining millions of dollars a primarily from low-income people. These findings are the first look at the Ohio payday and car title lending market since Ohio voters went to the polls in 2008 to affirm capping the rate at 28% annually, a mandate which lenders have subverted through legal loopholes. "The flourishing payday lending practices in Ohio

Abusive College-Bank Marketing Agreements to be Reined In Final rules issued today from the Department of Education will protect college students from being pushed into high-fee bank accounts by their colleges, banks and bank affiliates. The rules will ban overdraft and other bank fees on some accounts jointly marketed by these financial entities. It will also require that the accounts be marketed more fairly. Maura Dundon, Senior Policy Counsel at the Center for Responsible Lending made the following statement: The new rules will protect students from being steered by their colleges to into

Today, the Consumer Financial Protection Bureau released a proposal to rein in the widespread use of clauses in financial services contracts that ban class action lawsuits by groups of consumers who have been harmed. They stopped short of also banning binding mandatory arbitration provisions. CRL Policy Counsel Lisa Stifler offered the following remarks: When consumers are deceived or cheated when using a credit card, opening a bank account or getting any manner of credit, they should have an opportunity to make their case before an impartial judge. And if the cheating is widespread, those

A new policy brief released today by the Center for Responsible Lending provides a state-by-state snapshot showing predatory payday and car title lenders increasingly moving into installment loans. The lenders are continuing to offer unsafe loans with excessive interest rates, which are carefully designed to trap borrowers in a cycle of debt they cannot escape, and actively seeking to expand into new states. The report highlights that just because lenders are making an installment loan, it is no guarantee that it is a safe loan. The report makes recommendations to regulators and policymakers

Today, the Consumer Financial Protection Bureau's (CFPB) and Department of Education (DOE) issued a new report on student loan servicing that confirms concerns that the student loan servicing system is both hurting borrowers and taxpayers and in need of swift regulatory reform. Maura Dundon is Senior Policy Counsel at the Center for Responsible Lending and an expert on student lending issues. She issued the following statement: This report confirms that student loan servicing is a mess in need of an urgent cleanup. The CFPB should use all available tools, including rulemaking, to address these

Yesterday, the federal Consumer Financial Protection Bureau (CFPB) announced that Fifth Third Bank will pay $21 million back to consumers as a part of two investigations into the institution’s practices. The bank will pay $18 million to African American and Latino consumers for engaging in auto dealer markups a discriminatory lending practice that resulted in borrowers of color paying more for their car loans. It will also pay $3 million in relief to borrowers affected by deceptive add-on product credit card marketing. Chris Kukla, Senior Vice President and expert on auto lending issues at the