Press Releases

This week in Sacramento, the banking committees of both houses considered two bills designed to mitigate the effects of California's foreclosure crisis, and both failed in hearing rooms packed with supporters. Both bills, however, will be re-heard next week. Even in light of tremendous involvement from constituents, consumer advocates, labor and grassroots organizations—and on the heels of robo-signing scandals that have caused thousands of wrongful foreclosures—legislators continue to oppose fair and simple legislation that would help Californians and the economy. "Legislators listened to

Banks use scare tactics and other misleading practices to persuade consumers to opt into high-cost overdraft programs for debit card purchases, a new CRL survey finds. Even so, the survey finds, most consumers choose not to opt in. The survey results contradict claims that consumers overwhelmingly want to sign up to pay nearly $35 on average each time they overdraw their checking account by a small amount with their debit card. See the full report. The survey finds that of the 33 percent of respondents who did opt in: Sixty percent said an important reason they did so was to avoid a fee if

Consumers who financed a car through a dealership in 2009 will pay more than $25.8 billion in extra interest over the lives of their loans because of dealer interest rate markups, according to new research by the Center for Responsible Lending (CRL). This is an increase of 24 percent from 2007. CRL also found that undisclosed markups increase the odds that a subprime borrower will default by 12 percent and odds that he or she will end up having their car repossessed by 33 percent. The report, "Under the Hood: Auto Loan Interest Rate Hikes Inflate Consumer Costs and Loan Losses," examines the

The following statement was issued by the Center for Responsible Lending, the Community Mortgage Banking Project, the Mortgage Bankers Association, the Mortgage Insurance Companies of America, the National Association of Home Builders and the National Association of Realtors in advance of the April 14 th House Subcommittee on Capital Markets and Government Sponsored Enterprises hearing on the Qualified Residential Mortgage: "In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time

Why: A car is the most common nonfinancial asset Americans own. For most it's a necessity, not a luxury. Too many families suffer at the hands of unscrupulous dealer-financed lending practices: New CRL research shows consumers pay over $20 billion each year in added, nontransparent dealer markups. "Yo-yo" sales and unnecessary service add-ons make car loans needlessly expensive for millions of consumers. What: Experts from the Center for Responsible Lending, the National Consumer Law Center, and the National Association of Consumer Advocates will take part in a roundtable held by the Federal

National consumer, civil rights, and labor groups ask bank regulators to withdraw the proposed consent orders issued to the nation's mortgage servicers and to work with the state Attorneys General and United States Department of Justice to obtain a joint settlement that addresses illegal servicing practices in a meaningful manner. The draft consent orders that have been released to the press do not hold servicers accountable for illegal practices and do not stop avoidable foreclosures. Read the letter. For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org

A positive move by one of the nation's biggest banks this week highlights the extent of overdraft abuse within the financial system and should encourage bank regulators to undertake further reform. In response to consumer feedback, Citibank announced it will begin clearing checks from lowest to highest to minimize overdraft fees. That will be a departure from clearing check transactions in high-to-low order, a common banking practice that creates more overdraft fees by emptying the account faster. This decision makes Citibank unusually active among our nation's largest banks in voluntarily

We renew our call for bank regulators to do their job by protecting consumers from abusive debit card overdraft practices. Bankers' whining about minor reforms should not slow the progress of prudent banking policy. As the subprime mortgage fiasco shows, bad policy allows bad practices that hurt not only borrowers, but investors, taxpayers and the banks themselves. The FDIC has taken an important step by requiring, among other things, that banks inform their frequently overdrawn customers of cheaper overdraft alternatives. Its new guidance warns FDIC-supervised banks against allowing overdraft

Today marks the end of a long and notorious era in lending history, as new Federal Reserve rules take effect to stop mortgage kickbacks. For years, mortgage brokers and loan officers could charge different borrowers different prices for mortgages, even when borrowers had the same qualifications. By steering some customers into unnecessarily riskier and more expensive loans, mortgage brokers often pocketed thousands of dollars in extra pay. CRL research confirms that borrowers typically have paid more for brokered loans, especially on subprime mortgages. Almost 75% of all subprime mortgages

Although payday loans are marketed as quick solutions to occasional financial shortfalls, new research from the Center for Responsible Lending shows that these small dollar loans are far from short-term. Payday Loans, Inc., the latest in a series of CRL payday lending research reports, found that payday loan borrowers are indebted for more than half of the year on average, even though each individual payday loan typically must be repaid within two weeks. CRL's research also shows that people who continue to take out payday loans over a two-year period tend to increase the frequency and extent