Support HR 3915: Mortgage Reform and Anti-Predatory Lending Act of 2007
Congressman Miller, Congressman Watt, and Chairman Frank introduced the "Mortgage Reform and Anti-Predatory Lending Act of 2007" on October 22, 2007. The proposed legislation addresses many abusive lending practices that contributed to today's foreclosure crisis, including reckless underwriting practices, subprime prepayment penalties, and yield-spread premiums. However, it is critical that the details of remedy and enforcement provisions are strengthened in...
Calhoun: Are Legislative Remedies to Limit Predatory Lending Really Remedies?
Federal Reserve System's Fifth Community Affairs Research Conference "Financing Community Development: Learning from the Past, Looking to the Future" The best outcomes for consumers require a competitive market, fair opportunities, and a policy framework that makes both possible. The optimization of a policy framework along these lines is often most limited by the quality of information available concerning market realities...
The Payment Plan Smokescreen
The payday industry's "new" guidelines are already proven failures. Any reliance on them for legislative reforms will also fail. In states that have legislated these guidelines, the debt trap persists. Nearly two of every three loans still go to borrowers with twelve or more loans per year and less than one percent of transactions use the "mandatory" payment plan. The...
Debit Card Danger
Banks stand back as debits and ATM withdrawals cause high-cost overdrafts for their customers Rather than linking their customers' checking accounts to their savings or other resources to cover overdrafts, many banks and credit unions are automatically covering their customers' shortfalls with expensive short-term loans. More overdrafts are happening when customers swipe their debit card or make an ATM withdrawal...
CRL Review of "Defining and Detecting Predatory Lending" by Donald P. Morgan, Federal Reserve Bank of NY, January 2007
In a recent working paper, Donald Morgan, a researcher from the Federal Reserve Bank of New York, attempts to determine whether payday lending is predatory by comparing the welfare of households in states where payday lending is unlimited versus states where payday lending is illegal. After a comparative analysis, Morgan concludes that "unlimited" payday lending enhances welfare. However, Morgan's findings...
Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners
A CRL study released in December 2006, revealed that millions of American households would lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. The "Losing Ground" study was the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006. CRL found that despite low...
Financial Quicksand: Payday lending sinks borrowers in debt with $4.2 billion in predatory fees every year
Executive Summary: Financial Quicksand New CRL study finds borrowers pay $4.2 billion every year in excessive payday lending fees Every year, payday lenders strip $4.2 billion in excessive fees from Americans who think they're getting a two-week loan and end up trapped in debt. This report finds that across the nation payday borrowers are paying more in interest, at annual...