Research

On September 13, 2005, the Federal Reserve released Home Mortgage Disclosure Act statistics on mortgage lending showing once again that African-Americans and Latinos pay more for home loans than comparable white borrowers. Lenders claim that weaker credit records explain the disparities, but the industry opposed collecting any information in the HMDA data that would shed light on borrowers' creditworthiness. Only...

Overdraft lending: the problem Our nation's major banks and credit unions are making unsolicited, high-cost loans to their checking account holders when their account balance dips below zero, generating enormous fees for the banks and frequently driving their customers deeper into the negative. Financial institutions never have to reveal that customers pay triple- and quadruple-digit interest rates. They make overdraft...

The cost of compliance is a small percentage of mortgage lending expenses. We estimate that the use of automated systems lowers predatory lending law compliance costs to about one dollar per loan. Strong compliance also may reduce lenders' expenses by lowering the incidence of time-consuming and expensive foreclosures. Most important, the cost of complying with state laws is dwarfed by...

On September 15th, 2004, the National Home Equity Mortgage Association (NHEMA) released a report by Professors Richard DeMong and Richard Netemeyer of the University of Virginia that asserts that New Jersey's Homeownership Protection Act of 2002 has decreased access to credit for non-prime borrowers in the state. The authors assert that non-prime lending was lower and comprised a smaller share...

This report quantifies the fees that people with checking accounts are now paying for high-cost, short-term overdraft loans. Many people are finding themselves with overdraft loans they never asked for, do not want, and cannot afford. Federal regulators have failed to protect these customers. The Center for Responsible Lending finds that borrowers are paying more than $10 billion per year...

While the payday lending industry frequently describes its typical customer in detail, discussion of race is noticeably absent. This report corrects that omission. Our analysis of North Carolina neighborhoods reveals a powerful relationship between the proportion of African-Americans in a neighborhood and the prevalence of payday lending stores. African-American neighborhoods have historically been disadvantaged by unfair lending practices. This study...

On March 1, 2005, the FDIC announced revisions to its guidelines to banks engaged in payday lending. The guidelines seek to "ensure that this high-cost, short-term credit product is not provided repeatedly to customers with longer-term credit needs." Thus, the FDIC has taken the important step of recognizing that payday lending can lead to a debt-trap. The guidelines call on...

Prepayment Penalties Impact Minority Neighborhoods Click here to visit our tutorial, which walks you through a Truth in Lending disclosure form, and educate yourself. For years, subprime lenders have defended prepayment penalties by claiming that borrowers with penalties get a lower interest rate. Now, groundbreaking research by CRL shows that borrowers get no rate benefits with subprime prepayment penalties --...

Prepayment Penalties Impact Minority Neighborhoods Click here to visit our tutorial, which walks you through a Truth in Lending disclosure form, and educate yourself. For years, subprime lenders have defended prepayment penalties by claiming that borrowers with penalties get a lower interest rate. Now, groundbreaking research by CRL shows that borrowers get no rate benefits with subprime prepayment penalties --...

PAYDAY LENDERS OFFER DEFECTIVE PRODUCT, CLAIMING IT FILLS NEED FOR ACCESS TO CREDIT Predatory payday loans: trap borrowers in high-cost debt drain income and damage credit could be offered on HBCU campuses under new agreements Defenders of the payday lending industry use the term "access to credit" to make the argument that payday loans provide communities of color with financial...