Research

Michael Calhoun, president of the Center for Responsible Lending, testified before the U.S. Senate Committee on Banking, Housing & Urban Affairs on Tuesday, November 17, 2009. Mr. Calhoun offered support for the FAIR Overdraft Protection Act, introduced by Senator Christopher Dodd, as urgent and necessary reform for abusive bank overdraft fees.

The most common type of large loan held by Americans is the loan that finances their car—yet a recent mark-up of the Consumer Financial Protection Agency (CFPA) bill would allow auto dealers to be exempt from basic oversight that could save American families billions. Many dealers are like loan brokers: they typically write the car loans, then sell the loan to a third party lender. Common financial abuses among auto dealers are analogous to those that wreaked havoc in the mortgage market: confusing loan terms, hidden costs, and inflated sales commissions. As with mortgages, the financial...

And guess what! That's a GOOD thing. Bank of America and Citibank cover debit card and ATM overdrafts only if their customers have signed up for more reasonably priced coverage, by linking their savings or line of credit to their checking account. Q: Why is this A GOOD THING? No more surprise high-cost overdrafts at the ATM or checkout for customers of these banks. These two banks are so big, it means one third of debit card transactions made each year are not subject to these high-cost fees. Since Bank of America and Citibank are doing it, more banks and credit unions may follow in order to...

Read the full analysis (PDF) >> Download this summary (PDF) >> Reckless and abusive lending practices have left California victim to a foreclosure crisis with catastrophic consequences for families, communities and the state economy. Recent assessments and reports from policy analysts, industry insiders and the media suggest that the catastrophe is over: a bottoming of the housing and stock markets, the end of the recession, and the "green shoots" of recovery are all on the horizon. But the crisis is far from over in California. And if we are to get the economy on solid footing again...

Why do we need the Consumer Financial Protection Agency? First and foremost, we need accountability. The truth is, none of the responsible agencies took action to stop the reckless lending and bad risk management that triggered the economic crisis. When seven different agencies oversee financial institutions, it's easy to create loopholes and point fingers at someone else. The CFPA will make our financial system more streamlined, efficient, and focused on the interests of American families. What will the CFPA actually do? It consolidates responsibility for making and enforcing rules that apply...

U.S. House and Senate proposals promise significant reform Regulators have failed to stop our nation's financial institutions from moving from a policy of discouraging overdrafts to that of encouraging and maximizing overdrafts to drive up fees. The Overdraft Protection Act of 2009, H.R. 3409, introduced by Congresswoman Carolyn Maloney in October 2009, would make meaningful reform with measures similar to the FAIR Overdraft Coverage Act proposed in the U.S. Senate. H.R. 3409 would: require financial institutions to obtain explicit permission from all their customers before enrolling them in a...

CRL shares stories of everyday people affected by financial abuse and emphasizes the need for the Consumer Financial Protection Agency to ensure that they and others are protected from such abuses in the future. The Dow closes at 10,000 points, putting it back to where it was a year ago when Lehman Brothers collapsed, and Wall Street rejoices. But the reality is the economic crisis that began in the destructive subprime mortgage market continues for American families. Key economic indicators show American families are still struggling: foreclosures at an all time high nationwide; the dollar at...

October 20, 2009 Members, Financial Services Committee U.S. House of Representatives Washington, DC 20510 Dear Representative: As the Financial Services Committee prepares to continue its markup of H.R. 3126, we write to express our support for a strong, non-preemptive Consumer Financial Protection Agency (CFPA). In this regard, we call your attention to two issues that are expected to come up in today's markup. First, on maintaining the States' vital role, overly broad preemption in recent years contributed to the current financial crisis by removing state protections that deterred...

Banks and credit unions skim cash from accounts through unfair overdraft practices Rather than discouraging customers from overdrawing their accounts, the system most banks and credit unions now use creates additional overdrafts and maximizes the number of fees they can charge. CRL finds that bank fees for overdrafts increased 35 percent in two years, rising to nearly $24 billion per year in 2008. Customers are now typically automatically enrolled in overdraft systems that approve debit card transactions with no warning in the event of insufficient funds, so they frequently pay a $34 fee for...

How has your state fared in the financial crisis? These state-by-state fact sheets show some of the major costs of bad lending in recent years. They include delinquencies and foreclosures, the cost of bank overdraft loans and, where applicable, the cost of payday lending. We also include data showing the share of high-rate (subprime) mortgages made by national banks that were allowed to ignore state lending laws. United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky...