Research & Policy

H.R. 748, the Coronavirus Aid, Relief and Economic Security Act (CARES Act)—signed into law on March 27, 2020—offers important benefits for the public health crisis caused by COVID-19. However, the bill fails to provide substantive, comprehensive financial relief for vulnerable families who now face economic challenges, such as unemployment and reduced work hours, as a result of the crisis. It...

The COVID-19 crisis is having profound financial impacts on families across the country and on the economy overall. With businesses shuttered, and over 22 million unemployment claims filed in the first month of the crisis alone, it is hard to overstate the financial instability and hardship the crisis has produced. These impacts will worsen over time, as immediate income shortfalls...

From the letter to Secretary Mnuchin: The undersigned civil rights, faith, and community development organizations write to seek that you direct the Small Business Administration (SBA) to designate that Community Financial institutions (CFIs) receive one-third of the $30 billion set aside for three groups of lenders—CFIs, small insured depository institutions, and credit unions—pursuant to H.R. 266, the Paycheck Protection Program...

From the letter to Congressional leadership: The undersigned consumer and banking industry organizations write to urge Congress at the soonest possible opportunity to clarify that economic impact payments responding to this public health emergency are exempt from otherwise legally binding garnishment orders. Our organizations have worked together to address this issue and we believe that is possible to protect American...

While we applaud that quick action for student loan borrowers, we are concerned that this unprecedented crisis is affecting many borrowers who have Perkins loans or Federal Family Education Loan Program (FFELP) loans that are not federally owned and who are not covered under the CARES Act. We respectfully request that you take action to enact, as part of your...

H.R. 748, the Coronavirus Aid, Relief and Economic Security Act (CARES Act), signed into law on March 27, 2020, provided for a 6-month suspension and interest waiver on federally-owned student loans. It also halted all involuntary collections on these loans. These provisions only apply to Department of Education-held loans, excluding 1.9 million Perkins Loan borrowers, 5.98 million commercially held FFEL...

Even before the onset of the COVID-19 pandemic, US household debt was on the rise, reaching over $14 trillion. While much of this debt stems from mortgages, a growing amount stems from non-mortgage consumer debt, including student loans, medical debt, credit cards, installment loans, and auto loans. With the number of Americans facing unemployment, lost wages, and depleted savings due...

Payday lenders see chaos and crisis as a profit opportunity—this pandemic is no different. In many states, payday lenders are working to be declared essential businesses so that they can continue to prey on families even as financial insecurity increases. However, these loans that trap people in a cycle of debt are never essential--and in a crisis they are even...

From the full comment letter: The Center for Responsible Lending (CRL) and the Center for Community Self-Help (Self-Help) strongly oppose the OCC and FDIC’s proposed Community Reinvestment Act (CRA) regulations.... The most troubling outcome of theproposed rule is that it would unwittingly sanction redlining. The proposal relies on an overly simplistic evaluation measurethat focuses on the total dollar value of...

Housing accounts for almost 20% of our national economy. Disruptions in the housing sector will have a ripple effect across the economy. This crisis lays bare wealth and income inequality, including the racial wealth gap, that worsened in the last crisis and the structural flaws in our economy that produce this inequality. Actions must be taken now to protect financially...

Even during the best economic times, overdraft fees are a tremendous drain on working families and often cause irreparable harm. The fees compound into hundreds per year for banks’ most financially distressed account holders and some even end up spending over a thousand dollars in overdraft fees. They drive people out of the banking system altogether, which disproportionately harms people...

On March 26, 2020, five federal agencies (the OCC, FDIC, Federal Reserve, CFPB, and National Credit Union Administration (NCUA)) issued brief joint guidance to “specifically encourage” financial institutions to offer “responsible small-dollar loans” to both consumers and small businesses during the COVID-19 crisis. This guidance contains troubling language that could be read to permit banks to make payday loans. Banks...

A diverse coalition of community organizations signed on to this letter to Congress urging them to protect Americans from price gouging during this unprecedented COVID-19 crisis, by enacting a 36% APR cap on all loans. Congress should amend the Military Lending Act (MLA) to extend to ALL consumers the credit protections provided to members of the Armed Forces and their...

The Center for Responsible Lending (CRL) joined with 26 national civil rights, consumer, housing and labor groups, and 35 state groups in sending a letter to Congress with specific financial policy proposals that help address the needs of families most at risk from the impending economic collapse. A PDF of the letter is included above.

From the letter: We believe such a rulemaking is necessary to provide much-needed clarity to this thus-far opaque part of the U.S. financial system – that is, the manner in which parent companies and affiliates of ILCs are subject to any kind of federal regulatory or supervisory oversight. By contrast, the federal statutory, regulatory and supervisory framework for parent companies...

New Jersey has long been a national leader in the fight against predatory lending which strips wealth from communities. Strong state usury laws protecting New Jerseyans from payday lending in the state save New Jerseyans over $193 million annually. New Jerseyans continue to overwhelmingly support a rate cap on payday and consumer installment loans and want to ensure the strong...

If Treasury and FHFA release the GSEs from conservatorship, they should continue the return-regulated approach FHFA has used effectively in conservatorship. Utility-like regulation would allow the GSEs to continue to operate at low risk and in a way that provides broad access to affordable mortgage credit nationwide. Removing that check on GSE returns on equity would lead to greater risk...

Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps. This poll presentation is linked to above and here. Key findings include: An overwhelming majority (82%) of those who have taken out payday loans support an annual interest...

Georgia has long been a national leader in the fight against predatory lending, imposing strict usury limits on small loans. In 2004, Georgia legislators closed loopholes used by payday lenders to charge triple-digit interest rates; they reaffirmed their commitment to keeping payday lending out by increasing fines and criminal penalties for making small loans at illegal interest rates. These laws...

In South Carolina, payday and car-title lenders charge working families 395% interest, creating a debt trap that can keep South Carolina families in a cycle of debt for years. In fact, these lenders drain more than $245 million from South Carolinians, primarily from low-income families and communities of color. South Carolinians want reform that has been proven to stop the...

Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The results are presented in categories as short Powerpoint-style slide decks with key takeaways, charts, and maps. Dangers of Rent-a-Bank Schemes Bipartisan Support for Stopping Predatory High-Interest Loans Broad Support for Interest Rate Cap Among Payday Loan Borrowers

For most of Michigan’s history, state laws prevented payday lenders from operating, most recently by limiting interest on consumer loans at 25%. However, in 2005, Michigan became the last state to authorize payday lending when payday lenders pushed for a carve out allowing them to charge rates of 340% APR or higher. Payday lenders drain over $103 million in fees...

Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps. Key findings include: Two-thirds of voters (66%) are concerned about the ability of high-cost lenders to arrange loans through banks at rates higher than the state laws allow...

We, the consumer and civil rights groups named above, write to strongly oppose the Federal Deposit Insurance Corporation (FDIC)’s proposed rule on Federal Interest Rate Authority (proposal or proposed rule). The proposed rule would allow predatory non-bank lenders to route their loans through banks to evade state interest rate caps. The proposal is outside the FDIC’s statutory authority; it is...

Borrower story from the testimony of Graciela Aponte-Diaz: California borrower story: I currently have an installment loan in the amount of $2600.00 from Speedy Cash . . . . At the same time, I also have [x] $300.00 payday loans from [x] different storefronts in my neighborhood, including Speedy Cash. So basically, I have both a $300.00 payday loan from...