Research

CRL, the National Association of Realtors, the National Association of Homebuilders, and the Consumer Federation of America sent a joint letter to federal regulators, urging them to avoid arbitrary high down payment requirements on mortgage loans. We argue that this would make buying a home more costly, lock out many first-time homebuyers, and short-circuit a recovery of the housing market. Instead, regulators should adopt standards for core underwriting factors to lower the risk of default. These include strong loan documentation, assessing a borrower's ability to repay, reasonable debt...

Most consumer finance companies turned a profit in 2008. While the rest of the financial world was reeling from the recession and the effects of poor lending practices, 80% of NC consumer finance companies turned a profit. Clearly, the law provides ample opportunity for consumer finance companies to profit. Consumer finance companies are demanding guaranteed profits. The CEO of a consumer finance company said in an open meeting, "I deserve a 15% return on equity." The law should only guarantee the ability to make a profit, not confer a right to profit for anyone who applies for a license...

Download Full Report (PDF) NCCOB REPORT SHOWS THAT CHANGES TO THE CONSUMER FINANCE ACT ARE UNNECESSARY AND UNWARRANTED "In light of the foregoing findings and after careful consideration of the following report and submissions from meeting participants, the Commissioner does not recommend any changes in the CFA [Consumer Finance Act], either to enhance industry revenue or increase consumer protections." The report is the culmination of four NCCOB-sponsored meetings – three and one half of which were dedicated to industry presentations -- and months of data analysis and other research. This is...

Recent proposals call for requiring prospective homeowners to make a 10-20 percent down payment when purchasing a home. This is seen--mistakenly--as "getting back to the way mortgages used to be made." In fact, low down payment home loans [i] have been a significant and safe part of the mortgage finance system for decades, bearing little resemblance to subprime and other alternative mortgage products that crashed our economy. And responsible low down payment loans are also a key to the recovery of our nation's housing market and economy. CRL's paper discusses the following key points: Between...

Press Release Full Pollster's Report A brief poll conducted in November 2010 to guage public opinion of a potential moratorium and other land-use restrictions on paydy lenders in San Jose found that most voters hold an unfavorable view of payday lending; many would like to see stronger restrictions on payday lenders and most believe that the City of San Jose should regulate payday lenders where possible. According to the Poll Payday loan stores start with a bad reputation. Fifty-two (52%) percent of voters hold an unfavorable view of them. This is higher than the unfavorable ratings of both...

Read the full, original report or executive summary from February 2011. Watch our 4.5 minute video of Senior Researcher Josh Frank discussing the findings. Updated CARD Act Research (June 2011): Clearer Pricing Not Raising Rates CRL's research shows that the Credit CARD Act of 2009 has reversed much of the unclear pricing on credit cards, without leading to higher rates or more difficulty in getting credit. These findings refute claims made by opponents of the credit card reforms. "People mistake higher rates on mail solicitations and other offers in the last year as a price hike," said CRL...

Congress should promote a strong, engaged Consumer Financial Protection Bureau Consumer spending comprises 70% of the U.S. economy, so restoring consumer confidence and demand for products is vital to creating jobs. This is more likely to happen if consumers know that the financial marketplace is fair and safe for everyone.In addition, small businesses—which create 80% of our nation's new jobs—rely heavily on non-bank credit and need access to low-cost, fair credit to grow. This document provides a quick overview of CFPB's objective and scope of activity. "Business leaders who care about the...

Download our complete hill brief Wall Street Led the Toxic Market 5 Facts You Should Know About Fannie Mae and Freddie Mac Additional Resources on the GSEs' Role in the Financial Crisis " Fannie, Freddie and the Foreclosure Crisis" – Center for Community Capital " Faulty Conclusions Based on Shoddy Foundations" – Center for American Progress Fact: The GSEs were prohibited from buying subprime mortgages. Fannie and Freddie could not guarantee or securitize subprime mortgages because subprime loans were outside the prescribed GSE guidelines. All subprime mortgage-backed securities were created...

CRL and other advocates join mortgage industry leaders in urging regulators to carefully consider how they define mortgages that will be exempt from certain rules. An overly narrow definition could unnecessarily tighten access to home loans.

CRL and allies recommend that regulators include servicing standards when implementing financial reform. This letter also includes specific recommendations for defining a "qualified residential mortgage" that encourages sustainable home loans.