Research & Policy

The Consumer Financial Protection Bureau (CFPB) mortgage rules strike the right balance between protecting consumers while also enabling lenders to comply with these new reforms. Throughout the rulemaking process and in the final result, the CFPB has taken a measured and reasonable approach. As a result, these mortgage rules will provide important legal protections for borrowers and for lenders. The...

Dual tracking is the servicer practice of simultaneously pursuing loan modifications and foreclosure proceedings. This chart offers a side-by-side comparison and analysis of how the National Mortgage Settlement, the California Homeowner Bill of Rights, and related rules from the Consumer Financial Protection Bureau have each taken steps towards eliminating this practice. The comparison includes variances in rule applications, borrower outreach...

The Center for Responsible Lending responds to a recent National Bureau of Economic Research working paper "The Vulnerability of Minority Homeowners in the Housing Boom and Bust," outlining flaws in the paper's analysis and methodology. Most importantly, CRL disputes the authors' conclusions that disparate default rates should call into question the value of homeownership in addressing the racial wealth gap.

Dual tracking is the servicer practice of simultaneously pursuing loan modifications and foreclosure proceedings. This chart offers a side-by-side comparison and analysis of how the National Mortgage Settlement, the California Homeowner Bill of Rights, and related rules from the Consumer Financial Protection Bureau have each taken steps towards eliminating this practice. The comparison includes variances in rule applications, borrower outreach...

As the Consumer Financial Protection Bureau refines mortgage rules, CRL addresses how mortgage put-backs by GSEs should affect the Qualified Mortgage status of mortgage loans. CRL also support CFPB's rule that state servicing standards will not be preempted by Federal rules.

We write to thank the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) for the proposed guidance addressing bank payday lending, particularly the underwriting requirements and limits on repeat loans. These critical provisions address a central problem with payday lending: lenders’ failure to verify the borrower’s ability to repay the...

A key mortgage reform included in the Dodd-Frank Wall Street Reform and Consumer Protection Act is at risk of being weakened by new legislation submitted during the 113th Congress. House bill H.R. 1077 would create loopholes in the definition of "Qualified Mortgage" and, as a result, allow higher-fee mortgages to improperly gain Qualified Mortgage status. The Qualified Mortgage designation is...

Should federally-insured credit unions push payday loans with triple-digit interest rates? CRL and the National Consumer Law Center (NCLC) say no, urging the National Credit Union Administration (NCUA) to stop its members from making these types of predatory loans. Most credit unions conduct responsible lending that does not include payday-type loans. However, NCLC has identified nine federal credit unions that...

This brief, co-authored by CRL and Consumers Union, examines recent legal and regulatory efforts to help troubled homeowners avoid foreclosure. These include rules by the Consumer Financial Protection Bureau to standardize how servicers act and communicate with homeowners, the National Mortgage Settlement negotiated with major servicers by 49 state Attorneys General, California's Homeowner Bill of Rights, and other state laws...

California payday loan borrowers get caught in a cycle of repeat borrowing of 459% Annual Percentage Rate (APR) loans. Reforms are necessary to ensure that payday loans serve their advertised purpose and better protect consumers. SB 515 proposes a series of reforms to allow payday loans to better serve their advertised purpose while making the loans safer for consumers. Read...

SB 515 includes three principal reforms California payday loans: it caps the number of payday loans per borrower at four per year; extends the minimum term of a payday loan, so that borrowers will have more time to accumulate the amounts necessary to repay it; and requires all lenders to apply standardized underwriting guidelines to ensure that borrowers have a...

Banks pitch payday loans as short-term borrowing that allows their customers to deal with a financial emergency, repay the loan, and move on. In fact, CRL's research shows that their triple-digit interest rate loans trap borrowers in a long-term cycle of repeat loans. Read the full report Read the summary Banks continue to claim that their payday products are intended...

The Monitor of the National Mortgage Settlement recently detailed progress on the $20 billion obligation of the nation's five largest mortgage servicers, under their agreement with 49 state Attorneys General and the Administration. This report, Ongoing Implementation, reported on efforts made over a 10-month period, March 1, 2012 to December 31, 2012, towards home retention, loan modifications, and other assistance...

As the U.S. Senate Banking Committee prepared for a March 20, 2013 vote on the reappointment of CFPB Director Richard Cordray, CRL urged committee members to swiftly act and confirm him.

Dear Chairman Bernanke, Director Cordray, Director Gruenberg, and Comptroller Curry: One year ago, we wrote to urge the federal regulators of our nation's banks to take immediate action to stop banks from making unaffordable, high-cost payday loans. We were encouraged by the FDIC's May letter indicating that it was deeply concerned and was investigating the practice, and we have also...

Banks that engage in payday lending have been in the media spotlight. Here we give a large sample of recent media coverage, legislative proposals, and public concerns directed at debt-trap lending by banks.

Joint Recommendations from CRL and Consumers Union States have yet to recover from the foreclosure crisis that has stripped trillions of dollars from homeowners and devastated local communities across the nation. Industry analysts estimate that 6 million borrowers remain at risk of foreclosure. States are in a strong position to prevent unnecessary foreclosures, stabilize local housing markets and protect homeowners...

Joint research from CRL and the Consumer Federation of America finds that car-title loans—small-dollar loans secured by the title to a vehicle owned outright—cost U.S. consumers $3.6 billion a year in interest on $1.6 billion in loans. Read the Full Report Read the Executive Summary These products share many of payday loans' predatory features: triple-digit interest rates, balloon payments at...

Applying safety and soundness standards to bank payday loan products follows longstanding principles and policy of the prudential regulators. Consistently, the prudential regulators, including the OCC, FDIC and the Federal Reserve, have addressed problems with a variety of consumer lending products by citing not only consumer protection concerns, but also safety and soundness concerns, even when those products are very...

On February 23, the New York Times published an article describing how some banks enable Internet payday lending. In this brief, CRL provides additional legal context to supplement that article.

CRL and allied organizations maintain that CFPB's proposal addresses two issues critical to the future of safe, sustainable, and affordable access to mortgage credit. First, it considers how to define compensation for the purpose of calculating the points and fees cap contained in the qualified mortgage definition. Second, it proposes a series of exemptions for specialized lending programs and financial...

The Center for American Progress, Center for Responsible Lending, Consumer Federation of America and the National Council of LaRaza respond to the Consumer Financial Protection Bureau proposal on the Ability to Repay Standards. The allies offered specific practices to ensure affordable access to mortgage credit. Two specific issues formed the crux of their concerns: How mortgage lending compensation is defined...

A recent CoreLogic report ( The Mortgage Market Impact of Qualified Mortgage Regulation) asserts that 48 percent of the mortgage market would not qualify as a "safe loan" under new Qualified Mortgage (QM) guidelines. CRL's review of this study finds that CoreLogic's model unnecessarily excludes certain categories of loans and makes broad (and possibly unwarranted) assumptions about the expiration of...