Research

Recent enforcement actions against debt buyers by state and federal law enforcement agencies illustrate widespread problems in the debt buyer market that must be addressed. The Federal Trade Commission recommends in its 2013 and 2010 reports that states adopt reform efforts to address these market problems. Based on its review of enforcement actions, industry data, and the FTC's reports, CRL...

This paper's findings highlight that the lack of underwriting for payday loans creates economic distress for borrowers from the very first loan: Nearly half of all payday borrowers defaulted within two years of their first loan. Of borrowers who defaulted, nearly half did so within the first two payday loans. Default does not necessarily signal the end of payday borrowing...

On March 26, the Consumer Financial Protection Bureau offered a first look at proposals under consideration to curb the payday loan debt trap. The consumer agency released information outlining their deliberations at a field hearing in Richmond, VA – at which the agency also heard from a panel of consumer and civil rights advocates, as well as payday industry representatives...

Some colleges and banks enter into exclusive agreements to offer students checking accounts – usually these accounts come furnished with a debit card that prominently displays the school logo and can sometimes be used as student ID. For banks, these exclusive agreements mean a captive audience for their bank products (checking accounts, credit card accounts) and usually a customer for...

In "Payday Loan Rollovers and Consumer Welfare," Jennifer Lewis Priestley analyzes proprietary payday loan data for borrowers who received payday loans from 2006-2009 in California, Florida, Kansas, Missouri, Oklahoma, Texas and Utah to estimate the impact of payday rollovers on consumer welfare (as measured by changes in Vantages Score). The author finds that payday borrowers who engage in protracted refinancing...

In "Do Defaults on Payday Loans Matter?" author Robert Mann uses a difference-in-difference regression-based analysis to analyze "harm" in the payday lending market. He finds that little difference in changes in credit scores between payday defaulters and non-defaulters and uses this as evidence that payday loans do not cause harm. However, this study suffers from significant conceptual and technical flaws...

A new bipartisan poll of likely 2016 voters finds that voters across party lines strongly oppose unfair lending practices and support financial regulations and enforcement by the Consumer Financial Protection Bureau. Strong Bipartisan Support Download the full memo (PDF) In particular, voters of all parties oppose a range of common payday lending practices, and strong majorities across party lines want...

In February 2013, the American Fair Credit Council, an association of debt settlement companies, released a report that claimed to assess the outcomes of debt settlement services by the industry. This report, "Options for Consumers in Crisis: An Economic Analysis of The Debt Settlement Industry," was commissioned by the AFCC, and fails to demonstrate that debt settlement leaves consumers better...

The auto finance market has grown significantly in the past few years. According to Experian Automotive, outstanding auto loan balances reached a record-breaking $870 billion in the third quarter of this 2014, an increase of 9.9% and 24.5% over the same periods in 2013 and 2012, respectively. As of the end of the third quarter of 2014, loans to consumers...

Senior Policy Council Maura Dundon submitted testimony to the Department of Education on its 2015 rulemaking agenda.