Research

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 off and in fact overstates the benefits of debt settlement for the consumers studied. This CRL analysis details the flaws in the report.

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 with below prime credit comprised 38.7% of open accounts, totaling over $336 billion. Also, according to the Federal Reserve, "The dollar value of originations to people with credit scores below 660 has roughly doubled since 2009, while...

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

By Maura Dundon Originally published by American Banker The Consumer Financial Protection Bureau's recent report on private student loans drew a sharp critique from lenders, who claim that the CFPB unfairly singles out private loans while ignoring problems with federal student loans. While the federal loan program has issues of its own, private student loans have distinct concerns. Congress instructed the CFPB to pay special attention to private loans precisely because they have a problematic history of causing long-term financial distress to borrowers. In the early 2000s, private student...

CRL and seven other civil rights organizations jointly authored a policy brief that shares the adverse impacts students of color experience and a primary impetus for a strong gainful employment rule.

On October 29, the Center for Responsible Lending joined a coalition of consumer and civil rights organization to comment on the proposed changes to the Home Mortgage Disclosure Act (HMDA) reporting requirements. Jointly, the groups applauded the utility and growth of the HMDA – which was created as a legislative response to combat urban disinvestment and the practice of redlining. HMDA requires that mortgage lenders report specific information about the loan practices every year – and that information is publicly disclosed. This information has been a critical tool for researchers, community...

The California Department of Business Oversight (DBO) released data on October 3, 2014 showing the extent to which repeat lending comprises the bulk of payday loan activity. Over 75% of all payday loan fees are from borrowers with 7 or more payday loans in 2013. The Center for Responsible Lending's analysis of DBO's data supports the conclusion that, far from offering a quick financial fix, the industry's practices and its loans are designed to trap borrowers in long-term, unaffordable debt. Payday loans are keeping borrowers locked in a state of financial crisis, pushing safer options further...

Attorneys General representing states in the South, Midwest, Southwest and Northeast stand united in support of progressive reforms affecting for-profit college accountability. In a letter to Members of Congress, the officials wrote, "[E]ach of our offices have encountered far too many former and current for-profit school students who have been harmed by the dishonest and unethical practices of some for-profit institutions."

This comment letter signed by 15 organizations supports the CFPB's proposal to make consumer complaint narratives public, and emphasizes the need to do this in the context of student loans. It also provides recommendations on how the complaint intake process could be improved so that more borrowers would be able to submit problems.

A post-secondary education is increasingly necessary in order to obtain a high-quality job and a lifetime of financial security and wealth-building opportunities. Many students finance their education through student loans because they see its value as an investment in their future. However, according to the research presented in this paper, the value of that investment is questionable for those students enrolled in for-profit colleges. Although historically students almost exclusively attended public and private, non-profit two- or four-year institutions, in the past forty years—and...