Research & Policy

The following provides an overview of Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger’s proposal to repeal the CFPB’s 2017 rule aimed at stopping the debt trap of payday and car title loans. This document includes the Center for Responsible Lending’s (CRL’s) initial analysis of the purported rationale for the repeal. As we further consider the proposal, our reactions may evolve. Undeniably, the proposal would result in a significant reversal of key consumer protections for the benefit of lenders who charge interest rates of more than 300% APR. Download the complete PDF.

This written testimony focuses on three key areas of concern: 1) abuses by student loan servicers prolong and deepen the problem of student loan debt; 2) For-profit schools disproportionately drive student loan debt nationally and in Colorado; and 3) the federal rollback of existing protections bolsters the need for state action. Download the full testimony. (PDF)

For-profit schools target students of color, low-income students, women, and veterans for enrollment, while failing to provide a quality education enabling students to obtain gainful employment. As is described below, New York for-profit students are more likely to have higher debt loads, lower graduation rates, and higher default rates than other students in the state. Consequently, an inordinate number of low-income students, students of color, and women in New York are left with large loans that they cannot repay and very little to no educational benefit in return. The state can and must...

The Center for Responsible Lending (CRL) and the National Consumer Law Center (on behalf of its low income clients) (NCLC), joined by Americans for Financial Reform Education Fund, the Leadership Conference for Civil and Human Rights, and NAACP, submit these comments in response to the FDIC’s request for information (RFI) on small-dollar lending. We appreciate the FDIC’s ongoing work to encourage banks to meet consumers’ needs and to promote a more inclusive banking system. Indeed, we are very concerned about the persisting racial disparities the new FDIC unbanked/underbanked survey...

By the Stop the Debt Trap Alliance of Oregon, in partnership with the Center for Responsible Lending (CRL) In 2006, when Oregonians noticed the devastating impact payday and car-title lending was having on their communities, a coalition pushed for a change in the state laws, bringing new consumer protections to hundreds of thousands of people in the state. This example shows the power of communities to make change on issues affecting the day-to-day lives of people in Oregon. Today, community organizations are once again coming together to continue improving the marketplace and economic...

One of the most prevalent problems with debt collection is harassing communications from debt collectors that violate consumers’ privacy and can cause serious harm to individuals and their families. In the Consumer Bureau’s survey on debt collection experiences, 42% of consumers who had been contacted by a collector in the past year reported that they had asked the collector to stop contacting them. More than a third of consumers were called four or more times a week and nearly one in five were contacted eight or more times a week. Even worse, 75% of consumers who asked to stop receiving calls...

The Center for Responsible Lending (CRL) appreciates the opportunity to provide comments on our priorities for the reauthorization of the Higher Education Act (HEA). CRL applauds your initial efforts to tackle these policy reforms in H.R. 6543, The Aim Higher Act. We appreciate your dedication to create a bill that gets our country closer to providing a debt-free higher education for American students. We also appreciate your commitment to underrepresented students demonstrated in provide a more accessible higher education to traditionally underrepresented students by strengthening college...

Existing racial wealth gap increases burden of student loan debt on Black families and communities: This means families of color are more likely to need to borrow for higher education, will have less income with which to pay it, and have less of a cushion to withstand future financial shocks, thus contributing to a higher likelihood of delinquency and default on student loan debt. Today, nearly half of Black graduates owe more on their undergraduate student loan after four years than they did at graduation, compared to 17% of white graduates. Even a degree is no shield from racial disparities...

Self-Help and the Center for Responsible Lending strongly oppose the Department of Homeland Security’s proposed rule to drastically expand the criteria that will be considered to determine whether an immigrant is likely to become a public charge. Being deemed a public charge is of tremendous consequence for individuals and families, as it permits the government to deny someone admission to the United States or a change in status, including lawful permanent residence. Continue reading the comment letter. (PDF)

Download the full text of the comment. In determining the capital standards for the GSEs, it is first critical to remember the primary drivers of the 2008 financial crisis and how those conditions have changed, affecting both the likelihood and severity of a future crisis. Next, the assumptions and mechanics of setting the capital regime must be closely examined in order to both set aside sufficient capital and enable the GSEs to provide their essential support for the housing market. Since the cost of holding capital to protect against a future crisis comprises the bulk of the total g-fees...

These comments are submitted on behalf of the National Fair Housing Alliance (NFHA) and the Center for Responsible Lending (CRL) to express our organization’s strong support for effective enforcement of the Community Reinvestment Act, and our concern about the approach proposed by the OCC in the above-referenced Federal Register notice, dated September 5, 2018, entitled “Reforming the Community Reinvestment Act Regulatory Framework.” The Community Reinvestment Act is a critical component of efforts to stop lending discrimination throughout the nation and the National Fair Housing Alliance...

Today, the Center for Responsible Lending, Americans for Financial Reform, and other leading national labor, civil rights, consumer advocacy, fair housing, and legal services organizations responded in a joint comment to the Office of the Comptroller of the Currency’s (OCC) Advance Notice of Proposed Rulemaking (ANPR) on how the agency should update Community Reinvestment Act (CRA) procedures. The groups pressed the OCC that any changes to the CRA must strengthen -- not weaken -- banks’ obligation to meet the needs of low-income communities and communities of color and that changes must result...

A 30-minute documentary produced by the Center for Responsible Lending, in cooperation with South Dakotans for Responsible Lending Before November 2016, payday and car title lenders in South Dakota charged annual interest rates up to 574%, trapping people in debt and often ruining their financial lives. The state legislature wouldn't pass reform, so South Dakotans put a 36% interest rate cap on the ballot. In a true David and Goliath story, payday lenders spent $3 million and put a competing measure on the ballot, a fake interest rate cap intended to fool people into thinking they were voting...

In the last decade, student loan debt has exploded, directly impacting the lives of millions of Americans and leaving its mark on the entire economy. There are currently over 44 million Americans with student loan debt. With the costs of higher education continuing to rise at alarming rates and a college education becoming a requirement for more and more jobs, millions more will soon be joining their ranks. Burdened by extraordinary student loan debt and stagnant wages, a generation of Americans are delaying or forgoing opportunities to build wealth, such as purchasing their first homes or...

This important hearing addresses how technological innovation has resulted in the development of new services and delivery platforms by both traditional financial institutions and non-bank fintech companies. The rapid expansion of market participants and their products has brought new opportunities, as well as significant consumer protection concerns, to the financial marketplace. In my written testimony I will discuss in detail the essential legal questions and consumer protection issues that must be at the center of the broader fintech dialogues occurring between consumer groups, lenders...

The Center for Responsible Lending (CRL) files this comment in response to the above referenced U.S. Department of Education’s Notice of Proposed Rulemaking (NPRM) which rescinds the 2014 gainful employment (GE) regulations. CRL is deeply troubled by the Department’s decision to do away with these important accountability requirements that protect both the welfare of career training students and the taxpayer resources that support them. The Department has a strong role to play in ensuring that career training programs meet the expectations of enrolled students, who are seeking a better...

The Center for Responsible Lending (CRL) files this comment in response to the above referenced U.S. Department of Education’s Notice of Proposed Rulemaking (NPRM) which rescinds the 2014 gainful employment (GE) regulations. CRL is deeply troubled by the Department’s decision to do away with these important accountability requirements that protect both the welfare of career training students and the taxpayer resources that support them. The Department has a strong role to play in ensuring that career training programs meet the expectations of enrolled students, who are seeking a better...

The brief filed in Student Loan Servicing Alliance v. Taylor, et al. urges the court to reject the plaintiff loan servicer association’s “federal preemption” argument, which claims that existing federal law bars states and the District from engaging in any regulatory oversight of loan servicers. As the brief highlights, this preemption argument is legally unfounded and unwise. In fact, D.C.’s efforts to regulate loan servicers finds strong support in legal precedent and sound policy to prevent disastrous consequences for the most vulnerable student borrowers and communities, especially...

Both the GSEs and Ginnie Mae continue to provide critical mortgage capital to underserved communities. The GSEs purchased more than two million homes and refinance mortgage loans in 2015, including almost half a million loans to low- and moderate-income borrowers, nearly 400,000 loans to borrowers of color and over 300,000 loans to borrowers living in rural areas. At the same time, smaller financial institutions (those with assets less than $10 billion) originated and sold loans to the GSEs in order to meet the credit needs of nearly 400,000 borrowers seeking mortgage credit in rural...

On this tenth anniversary of the financial crisis, there have been many retrospectives on the US government’s response to that catastrophe, with more to come. The commentary to date has largely focused on the extraordinary measures taken to prevent a much deeper collapse of the American and global economies. Measures were implemented to address the immediate crisis and reduce the likelihood of a repeat event. Both had a significant impact. But in examining the crisis and its responses, it is critical to remember that it was triggered and substantially driven by a dysfunctional housing market...

The Center for Responsible Lending (CRL) files this comment in response to the U.S. Department of Education’s proposed rule that would amend the Borrower Defense to Repayment provision of the Higher Education Act (HEA) and rescind and rewrite previously promulgated regulations from 2016. CRL is extremely concerned about the Department’s decision to rewrite rules meant to protect students and taxpayers from unscrupulous for-profit colleges and its tacit refusal to hold these schools accountable for their predatory tactics and activities. Moreover, CRL finds the Department’s current proposal...

The Center for Responsible Lending (CRL) files this comment in response to the U.S. Department of Education’s proposed rule that would amend the Borrower Defense to Repayment provision of the Higher Education Act (HEA) and rescind and rewrite previously promulgated regulations from 2016. CRL is extremely concerned about the Department’s decision to rewrite rules meant to protect students and taxpayers from unscrupulous for-profit colleges and its tacit refusal to hold these schools accountable for their predatory tactics and activities. Moreover, CRL finds the Department’s current proposal...

Florida is fertile ground for studying for-profit education, given the industry’s outsized presence there and a weak state regulatory environment. In the early summer of 2017, The Center for Responsible Lending (CRL) conducted focus groups in Orlando, Florida with 75 individuals who had attended for-profit colleges within the last 10 years and borrowed to finance their education. The research sought to better understand the circumstances these individuals faced that led them to enroll in their respective schools and their experiences with choosing, enrolling, and attending the school; finding...

"The undersigned consumer, community, and civil rights organizations write to urge the Consumer Financial Protection Bureau to reverse its recent decision to suspend the supervision of payday, car title, and other lenders for violations of the Military Lending Act (MLA). We also urge the Department of Defense to ensure that the Military Lending Act is vigorously implemented without exemptions or loopholes to protect servicemembers and their families from financial abuse." Download the entire letter.

Consumer, civil rights, faith, and community groups are urging the FDIC Chair in this letter to keep in place the agency’s guidance urging banks to not sell these toxic loan products, which are harmful to consumers, banks’ reputation, and its safety and soundness. The coalition’s letter also calls for the FDIC to ensure small dollar installment loans are capped at 36% or less and to prevent bank partnerships that evade state interest rate limits.