Comment Letter

The undersigned Center for Responsible Lending (CRL) and National Consumer Law Center, on behalf of its low income clients (NCLC), write to comment on the update to the Uniform Interagency Consumer Compliance Rating System (CC Rating System) by highlighting three areas of particular concern: Overdraft practices Loans with a total cost of credit exceeding 36% annual percentage rate (APR) Bank partnerships with non-bank lenders whereby non-banks make loans they could not independently make under state law – i.e., rent-a-bank schemes The CC Rating System is right to emphasize harm to consumers...

The Financial CHOICE Act attacks the CFPB's structure and authority and would frustrate the CFPB's ability to fulfill its mission. Title III of the bill is aimed at obstructing the CFPB's ability to protect consumers from predatory financial products and practices. This title severely weakens the CFPB’s structure and authority in the following ways: Changes the structure of the CFPB from its current, effective single-director structure to a less effective five-member commission; Eliminates independent funding of the CFPB, putting it at the mercy of an annual appropriations process and...

CRL strongly supports the CFPB’s proposed rule to limit pre-dispute mandatory (forced) arbitration clauses in consumer finance contracts. Forced arbitration is a widespread issue affecting a plethora of financial products and services; it impacts the consumers CRL advocates for and implicates CRL’s mission to eliminate abusive financial practices. CRL applauds the CFPB for its efforts to restore consumers’ ability to band together to protect their rights in class actions as well as increase transparency in the use of forced arbitration in individual cases. Although the proposed rule is strong...

In a Statement for the Record to the Hearing of the Senate Committee on Banking, Housing, and Urban Affairs: Assessing the Effects of Consumer Finance Regulations, CRL expresses its support for post-crisis lending rules that have made the financial system safer by eliminating abusive financial products, reining in reckless behavior, and encouraging more effective oversight.

CRL applauds FHFA for its recognition of the importance of the Duty to Serve mandate in the Housing and Economic Recovery Act of 2008 (HERA) and for putting forth a strong proposed rule. We strongly support much of what FHFA is proposing. The comments in this letter address numerous questions on which FHFA requests input, including general process, evaluation, and public review, as well as specific comments on the three market areas.

Cars are the most common nonfinancial asset held by American families, and for some families, their most significant asset. Cars have become a necessity for U.S households, with more than 85% of the U.S. workforce using an automobile to commute to work. Car ownership is no longer a luxury but is a prerequisite to economic opportunity. The need for a car is particularly true for many low- and moderate-income families (LMI) and communities of color, who live or work beyond the reach of public transit systems. Given the role that cars play in the everyday lives of American families, we applaud...

A letter from seventeen consumer and civil rights advocacy groups to investor and auto dealer, Warren Buffett, urging him to help end discriminatory auto lending practices in this country. In 2014, Mr. Buffett's Berkshire Hathaway purchased the largest privately-held auto dealership group in the nation, the Van Tuyl Group. This letter calls attention to the widely documented problem of "racially motivated and discriminatory auto dealer markups."

Unfair debt collection practices, particularly those of debt buyers, undermine individuals' financial security, especially among low-income households and households of color. When people are pursued or sued for debt they do not owe, these unfair collection attempts not only threaten the unnecessary extraction of money from individuals, but also hinder opportunities to build assets for the future. Towards this end, strong, effective rules to prevent unfair practices can help keep hard earned wages in consumers’ pockets and build pathways to financial security. In this comment regarding the...

The Holder Rule is one of the most important actions the Commission has ever taken in preventing and remedying unfair and deceptive practices in the marketplace. When a seller of a good or service originates or helps arrange credit, the Rule allows consumers to raise the seller’s misconduct as a basis for bringing claims or defenses against the entity holding the debt. Specifically, the Rule requires a notice in the credit documents that assignees in credit sales and direct lenders related to sellers are subject to claims and defenses that the consumer has against the seller of the goods or...

The Center for Responsible Lending1 submits this comment to provide additional context about the consumer installment loan market, in particular to highlight issues unaddressed by the proposed settlement with One Main and Springleaf. In this letter, the undersigned organizations bring to your attention three areas of concern that the settlement did not address, but which have a significant impact on borrowers: The high incidence of repeat refinancing in the industry The sale of ancillary products such as credit insurance that significantly increase the cost of installment loans while providing...