Research

A report by the Center for Community Capital at the University of North Carolina provides evidence that allowing national banks to ignore state lending laws encouraged these banks to increase subprime lending, and that states with stronger lending laws have had lower foreclosure rates. [1] The study analyzes lending patterns and loan performance before and after 2004, the year the U.S. Office of Comptroller of the Currency exempted national banks from state anti-predatory lending laws through "preemption." A brief summary of the research: States with strong anti-predatory lending laws fared...

The US House Financial Services Committee heard from 30 consumer groups including CRL via an October 6, 2009 sign-on letter about ongoing auto financing scams. The National Association of Car Dealers (NADA) is lobbying hard for exemption from the CFPA (HR 3126). CRL and its allies strongly urge Committee members to ensure that the proposed consumer protection agency has strong car dealer oversight in order to curb marketplace abuses.

Today's overdraft practices are designed to drive up the fee revenue of banks and credit unions and not to discourage customers from overdrawing their accounts. Our report shows that fees are climbing very quickly and affecting millions of Americans every year. Over 50 million Americans overdrew their checking account at least once over a 12 month period, with 27 million accountholders incurring five or more overdraft or non-sufficient funds (NSF) fees. Banks and credit unions collected nearly $24 billion in overdraft fees in 2008. Overdraft fee income for banks and credit unions rose 35...

By Debbie Gruenstein Bocian and Keith S. Ernst A working paper recently released by the Columbia Business School, "Liar's Loan? Effects of Origination Channel and Information Falsification on Mortgage Delinquency" [1] reported three main findings: (1) mortgages originated through brokers are more likely to become delinquent than similar mortgages made through retail channels; (2) mortgages with low levels of income documentation are more likely to become delinquent than those with standard levels; and (3) African-American and Latino borrowers were more likely than non-Latino, white borrowers...

An essential component of the Obama Administration's proposal for improving oversight of our financial system would correct the current lack of adequate consumer protection standards that has plagued our financial system, and imperiled our economy. A new Consumer Financial Products Agency ("CFPA") would implement sensible protections and make sure that companies follow them. In addition to mortgages, the CFPA would protect consumers from out-of-bounds practices by mortgage lenders, credit cards, overdraft programs, and other credit and banking services. It will ensure that banking is safe for...

This latest report by the West Virginia Center on Budget and Policy found that in 2007 nearly $13 million were lost by working West Virginians through refund anticipation loans. Out of the nearly 77,000 West Virginians that used a RAL in 2007, nearly 60 percent of them were recipients of the Earned Income Tax Credit, a federal program designed to help low-to-moderate income working families with their tax burden. Despite the state's strong laws protecting consumers from other forms of predatory lending, the report also found that nearly 5 percent of the federal EITC funds coming into the state...

A geographically broad and bipartisan letter sent August 17 letter to key committee chairs in the U.S. House and U.S.Senate, signals strong state support for the proposed Consumer Finance Protection Agency (CFPA). Representing states and regions throughout the nation, 24 state attorneys general said in part, "We believe an independent federal agency combined with joint enforcement by state officials is the best option for meaningful consumer protection in this area."

Solutions exist. Here's a quick reference to CRL's top four policies for stopping the foreclosure epidemic: 1. Establish an independent agency dedicated to protecting consumers against bad lending practices 2. Make voluntary foreclosure prevention programs more effective and reach all those who qualify 3. Allow qualified homeowners to restructure mortgages under court supervision 4. Prevent predatory and reckless lending in the future 1. Establish an independent agency dedicated to protecting consumers against bad lending practices. In brief: Today’s foreclosure crisis shows the need for an...

Myth: The CFPA would duplicate the work of existing agencies, and increase regulatory burden on businesses. Reality: The new Agency would consolidate the consumer protection rule-making and enforcement that is currently scattered across several agencies. The functions would not be duplicated; rather, they would be stream-lined into a single agency, thereby reducing regulatory burden and expense. Myth: Giving the CFPA supervisory authority over consumer protection matters will create duplication and confusion. With the "safety and soundness" regulators examining institutions for "prudential"...

15 Fast Facts The magnitude of foreclosures and associated costs are daunting; the numbers tell the story. 1. Number of foreclosures initiated since 2007 6.6 million 2. Projected foreclosures during next 5 years Up to 12 million 3. Portion of all homeowners seriously delinquent on their mortgage 1 in 9 4. Portion of homes where owners owe more than property value Nearly 1 in 4 5. Drop in residential lending in 2008 from 2007 Over a trillion 6. Between 2006 and 2008, decline in existing home sales 24% 7. Between 2006 and 2008, decline in new home sales 54% 8. Between 2006 and 2008, % decline in...