Research

Structure Independent bureau at the Federal Reserve. Director Appointed by President, Confirmed by Senate, 5-year term. Funding Certain percentage of Federal Reserve's budget; additional funding may be made available through Congressional appropriations, at the option of the CFPB Director. Three categories of regulatory duties Rulemaking Supervision (routine, on-going examination and monitoring for risks and new developments, as well as on-going compliance) Enforcement Rulemaking Two different sources of rulemaking authority: "organic" authority: to prohibit unfair, deceptive or abusive...

Download this brief (PDF) >> Fed Issues Final Rules on Yield Spread Premiums The Federal Reserve Board issued final rules that take a big step forward in reining in arbitrary overcharges on mortgages resulting from "yield spread premiums" – i.e., kickbacks to brokers or lenders for making loans more expensive when borrowers qualify for a better deal. Background On Monday, August 16, 2010, the Federal Reserve Board issued final rules on how mortgage originator compensation and anti-steering. YSPs have been a legal form of compensation, but they are essentially kickbacks brokers and lenders...

Read the full report (PDF) >> Read the executive summary (PDF) >> California and the United States are in the midst of the worst foreclosure crisis since the Great Depression. Across the country, foreclosures have hit an all-time high, with nearly one in ten homes with a mortgage currently in some stage of foreclosure. In California, nearly one in eight—or approximately 702,000 homes—is currently in foreclosure, the economy is in ruins and unemployment remains at 12 percent. This report paints a picture of the foreclosure crisis in California, examines the who, the where and the why of...

Read the full comment to the Federal Reserve CRL Comments On "Report to the Congress on Reductions of Consumer Credit Limits Based on Certain Information as to Experience or Transactions of the Consumer"[1] The Federal Reserve recently issued a report based on a survey of credit card issuers that asked whether they had taken adverse action on consumers' accounts based on cardholder patronage of merchants by geographic location, merchant type or transaction type. This practice is commonly known as "behavioral scoring." The media have highlighted examples of card issuers judging consumers to be...

As the August 15th deadline nears for existing bank customers to opt in to high-cost overdraft programs, a new CRL analysis finds bankers use aggressive, often misleading marketing to target the most vulnerable customers.

Summary of Bill Full Session Law This legislation creates a program within the Commissioner of Banks' office designed to reduce the number of subprime foreclosures in North Carolina. The law requires that homeowners receive at least 45 days' notice before foreclosure proceedings begin, and gives the Commissioner of Banks (COB) the authority to extend the foreclosure process an additional 30 days to facilitate efforts between servicers and borrower to save the borrower's home. In addition, the law provides that the Commissioner may use existing funds to hire staff and to create a database...

A CRL analysis finds that payday lenders charge up to 572 percent APR for two-week loans at over 900 payday lending outlets in Mississippi. The typical borrower in that state pays an estimated $691 fees for a $350 payday loan repeatedly renewed, and still owes the principal. Overall, payday lending drains $270 million from Mississippi families every year. An exemption allowing payday lenders to charge many times the 36 percent APR cap in Mississippi expires in 2012, but the payday lending industry has always fought hard to protect their exempt status. We expect a tough fight during the 2011...

In recent years, a growing number of states have enacted interest rate caps and other protections to eliminate abusive payday lending practices that trap consumers in long term debt. Payday lenders repeatedly evade these rules, finding new ways to maintain business as usual and continue to offer short-term loans with triple-digit interest rates. The latest form of subterfuge is one in which the payday lenders position themselves as brokers, seeking licensure under state-level laws designed to regulate credit repair organizations. Under this scheme, payday lenders charge the maximum interest...

Debt settlement is a rapidly growing industry in which companies advertise that they can eliminate consumer debt by negotiating reduced debt payoffs with a consumer's creditors, usually for unsecured debt such as credit card debt and medical bills. What's the Problem? Flawed model: The debt settlement model is an inherently flawed one, in that it requires consumers who are deep in debt (typically $20,000-$30,000 worth, if not more) to save significant sums of money to settle each individual debt, but requires them to pay hefty up-front fees and monthly fees that leave the consumer with little...

A brief by the National Consumer Law Center shows state-by-state markups on auto loan rates by race, revealing wide disparities between costs for African-American and white car buyers.