Research

On May 27, 2014, the Center for Responsible Lending submitted a comment to the Department of Education in response to their proposed gainful employment rule. In the comment, senior policy counsel Maura Dundon highlights: how for-profit colleges may fail to provide students the skills or education necessary to seek gainful employment, yet still be the beneficiaries of federal financial aid how the resulting indebtedness disproportionately impacts servicemembers and students of color The 14-page comment also includes detailed recommendations on how best to improve the gainful employment rule...

Car title loans, like payday loans, are marketed as a quick financial fix, but lead to long-term debt and carry 300% annual interest rates. A typical borrower pays twice as much in interest and fees than she receives in credit extended. Nationally, car title lending drains $4.3 billion annually in excessive fees. Car title lenders systematically disregard a borrower's ability to repay as demonstrated through (1) lenders' advertising and marketing; (2) industry data and statements; and (3) negative consumer outcomes—namely, repeat loan refinancings and vehicle repossession.

Responding to an Advance Notice of Proposed Rulemaking, CRL addresses harmful practices that have become common in the debt buying and third-party debt collection industries. Debt buyers typically acquire charged-off debt without any supporting documentation. Too often account information is inaccurate, outdated or missing, and third-party collectors may use abusive tactics to pursue debt that may or may not be accurate. The letter concludes with recommendations to remedy these problems and to generally improve debt collection practices.

CRL and several other consumer and civil rights organizations commend the Office of the Comptroller of the Currency for issuing best practices on banks' sales of charged-off consumer debt. They urge the OCC to strengthen debt management practices further by adopting strict guidance to reduce harm to American families.

Enrolling in a for-profit college usually means higher costs of attendance and higher default rates on student loans. This research brief explores why students of color – African-American and Latino - enroll more frequently in these schools than do white students. CRL also reviews how the Department of Education's proposed Gainful Employment rule could improve student outcomes.

Oneshia Herring, legislative counsel at CRL, discusses three reasons why payday loans are an inherently defective product that violate any reasonable concept of fair and responsible lending. This testimony was presented at a CFPB field hearing on March 25, 2014, in Nashville, Tennessee.

A 13-member coalition of civil rights, housing and legal advocates called upon the U.S. Senate Banking Committee to preserve equal access to mortgage credit for all qualified borrowers. Together the groups stated that a robust housing market must be fair with equal credit terms and effective regulation. They also noted that the nation's demographic shifts will translate into seven out of every 10 new households formed over the next decade being households of color.

With America's student debt now more than $1 trillion and still growing, many borrowers face the likelihood of delaying their ability to begin their own households, buy a home or a vehicle. Further, in a tight job market, many new graduates are financially challenged to begin repayment even with their newly-acquired marketable skills. For consumers enrolled in predatory career education programs – offered by for-profit colleges – onerous debt can be incurred without accompanying skills or license to begin a new career. Consumers may also be subject to a range of deceptive and high-pressure...

CRL recently expressed support for the Massachusetts' Attorney General proposed regulations for occupational and for-profit schools. In its comments, CRL cited that although only 13 percent of students are enrolled at these schools, they account for 46 percent of federal student loan defaults – often in addition to high-cost private loans.

Negotiating on Car Loans Doesn't Help African Americans and Latinos Trying to negotiate a better interest rate on your car loan should generally result in a better deal, right? Not so for buyers of color who get loans from dealers. Our survey finds that African Americans and Latinos attempt to negotiate loan pricing with car dealers more often than white consumers: 39% of Latinos and 32% of African Americans reported negotiating their interest rate, compared to only 22% of white respondents. Yet white car buyers reported receiving lower interest rates—even those who didn't try to negotiate at...