Research

CRL President Mike Calhoun testified before the House Financial Services Committee that CFPB's rules strike the right balance of providing borrower protections while also ensuring access to credit.

In 2014, new mortgage lending reforms go into effect. Finalized by the Consumer Financial Protection Bureau, the reforms respond to the abusive lending practices that triggered the nation's financial crisis. The new rules also protect and preserve access to credit. Lenders must now consider whether a borrower has the ability to repay a mortgage. This change means an end to "no-doc" loans. Lenders also have incentives to originate a new category of loans called Qualified Mortgages. These "QM loans" restrict risky product features like excessive fees and teaser rates. Other reforms include new...

In reply to the Department of Education's request for comments on the form used by colleges to apply to be eligible for federal student loan funds, CRL called for attention to the arbitration agreements between schools and their students and employees. CRL said that forced arbitration undermines the transparency and accuracy of information reported by the schools, and could threaten the integrity of federal financial aid.

Debt settlement[ 1] programs too often are not the solution they are marketed to be, according to this new CRL research. Debt settlement companies promote their programs as a way for debt-strapped consumers to become debt-free while paying a fraction of what they owe their creditors. However, our research shows that debt settlement program participants may be left in a worse financial position than where they started and, furthermore, have no way to assess their likelihood of success before enrolling in a debt settlement program. Our analysis found that a client must settle at least two-thirds...

Morgan Drexen Case Illustrates Harm to Consumers In the past, debt settlement companies typically charged hefty fees upon enrollment, before settling any debts. This practice created heavy incentives for companies to sign up as many people as possible, collect fees, and not settle any debts. In light of these problems, the Federal Trade Commission (FTC) issued rules regulating debt relief in 2010. Among the most significant of these provisions is an "advance fee ban," which allows firms to collect fees on accounts only when a settlement agreement has been reached and at least one settlement...

A host of civil rights and fair housing allies joined with CRL in submitting comments to federal financial regulators and HUD. The comments which addressed proposed rules on credit risk retention requirements focus on three key recommendations: •Support for the proposed alignment of mortgage rules to restrict risky loan features; •Protection of access to credit for qualified homebuyers; and •Opposition to home down payment requirements.

The National Consumer Law Center, Consumer Federation of America, Center for Responsible Lending and 26 other consumer and civil rights groups sent a letter to federal regulators urging stronger measures to stop illegal payments from being taken out of consumers' bank accounts. The letter went to federal bank regulators, the U.S. Department of Justice, and the Federal Trade Commission.

A Framework for Housing Finance Reform, CRL's new working paper looks to how what's worked well at Fannie Mae and Freddie Mac before conservatorship, can be preserved. Conversely, it also identifies core causes of what went wrong with the two GSEs. The paper's ultimate goal is to bring forth ideas that will provide long-term stability in the marketplace.

Payday loans, whether made online, in stores or by banks are designed to trap individuals in long-term debt. Data consistently show that the majority of payday loan revenue comes from repeatedly churning borrowers, and individuals are typically indebted for most of the year. The predatory features of payday loans, and the impact of their long-term debt on consumers, have in recent years drawn the attention of legislators and regulators. Policymakers at all levels have acted to limit the payday lending debt trap, particularly in recent months.

Download the Report As a supplement to our full research publications, these resources tell the story of our on-going State of Lending research series visually, through graphs, charts, maps, and video. Related chapters: Mortgages, Auto Loans, Credit Cards, Student Loans The Spillover Cost of Foreclosures by State The Three Scapegoats Your Next Car Loan: Avoid Paying Too Much Prepaid Cards: Which is Best For You Growth in Plastic Payments Student Loans: Federal vs. Private Related chapters: Car-Title Loans, Overdraft Loans, Bank Payday Loans, Payday Loans Car-Title Borrowers' Two Bad Choices...