Research

Session Law (pdf) Frequently Asked Questions House Bill 1374, the "Protect Homeowners & Reduce Foreclosures" law, passed unanimously in both the North Carolina House and Senate and was signed into law by Governor Easley on August 16, 2007. This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process mortgage payments ("loan servicers"). It also addresses two recent NC Supreme Court decisions that made it harder for homeowners to sue for illegal lending practices. Here are the law's key provisions: Clarifies the...

Session Law (pdf) Frequently Asked Questions House Bill 1374, the "Protect Homeowners & Reduce Foreclosures" law, passed unanimously in both the North Carolina House and Senate and was signed into law by Governor Easley on August 16, 2007. This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process mortgage payments ("loan servicers"). It also addresses two recent NC Supreme Court decisions that made it harder for homeowners to sue for illegal lending practices. Here are the law's key provisions: Clarifies the...

On August 16, 2007, Governor Mike Easley signed into law the NC Predatory Lending Law, House Bill 1817. This law passed with strong support, and was endorsed by major financial organizations across the state as well as the Coalition for Responsible Lending. The law bans abusive lending practices that have contributed to the current subprime mortgage foreclosure crisis. This new law: Defines subprime loans and provides new protections. The law uses the Federal Home Mortgage Disclosure Act (HMDA) definition of subprime loans. As of 12/07, loans with an interest rate of 8% or higher would be...

Summary Frequently Asked Questions Session Law On August 16, 2007, Governor Mike Easley signed into law the NC Predatory Lending Law, House Bill 1817. This law passed with strong support, and was endorsed by major financial organizations across the state as well as the Coalition for Responsible Lending. The law bans abusive lending practices that have contributed to the current subprime mortgage foreclosure crisis. This new law: Defines subprime loans and provides new protections. The law uses the Federal Home Mortgage Disclosure Act (HMDA) definition of subprime loans. As of 12/07, loans with...

It's the rare car buyer who walks out of a dealership convinced they got the absolute best deal on their purchase. CRL researchers have closely scrutinized dubious car lending practices – using data derived from industry sources and results from a consumer survey – so that buyers might be better informed and get a fairer shake. "Car Trouble: Predatory Auto Loans Burden North Carolina Consumers," is CRL's first ever research report on this topic, and its findings are concerning. We found that total kickback volume in North Carolina for new and used autos bought in 2007 totals a massive $665...

Consumers are being hit with fees amounting to triple-digit interest rates on loans they did not ask for—and in many cases cannot afford—when they overdraw their bank accounts through checks, electronic transfers, debit card purchases, and ATM withdrawals. This is possible because the Federal Reserve Board has refused to close a loophole in the rules implementing the Truth in Lending Act that exempts overdraft loans from disclosure requirements. By bringing overdraft loans within the scope of the Truth in Lending Act, H.R. 1456 would provide the same basic consumer protections to checking...

These findings were obtained primarily from CRL research on overdraft loans. Total costs vs. funds extended: Total cost per year consumers pay in overdraft fees: $ 23.7 billion. Total funds extended by institutions to cover consumers' overdrafts: $ 21.3 billion. This means consumers had to repay $45 billion for $21.3 billion in very short-term credit. Mostly debit cards and small transactions: The most common trigger of overdraft fees are debit card transactions.Together, debit card and ATM overdrafts account for 46% of all overdraft fees. Most debit card transactions that trigger overdrafts...

As two trends collide—increasing use of debit cards among young adults and increasing use of abusive overdraft practices among major banks—college students and young workers just starting their adult lives are paying a high price. At least one hundred universities are contributing to this problem by selecting a single bank and granting them exclusive marketing privileges on campus. Such an arrangement might, for example, involve providing students with an official identification card that doubles as a debit card backed by the university's partner bank. When the partner bank uses abusive...

In a system enormously out of balance, fees for abusive overdraft loans have reach $17.5 billion per year, more than the loans themselves, which now amount to $15.8 billion per year. CRL's report, "Out of Balance," finds that abusive overdraft loans, once the exception, are now the rule in a system where not-sufficient funds (NSF) fees–historically used to discourage overdrafts—have shrunk to 31 percent of overdraft-related fees. Abusive overdraft loan fees now account for 69 percent of those fees. These small, high-cost loans are made by a bank or credit union to an account holder who is "in...

Former President George W. Bush's 2008 tax rebate was designed to stimulate the economy by putting dollars back into the hands of working people. In May of 2008, the IRS sent $600 checks to households making less than $75,000 per individual and $100,000 per couple, with an additional $300 for each qualified child. President Barack Obama has also proposed a combination of cutting taxes and encouraging spending to aid in economic recovery. But in the meantime, predatory lenders are stripping cash from the earnings of working people who fall into this same demographic—at astounding rates. Payday...