Latest news with #CenterforResponsibleLending
Yahoo
6 days ago
- Business
- Yahoo
North Carolina consumer advocates to Sen. Tillis: Protect us from the Trump grift-ocracy
Small business owner Dr. Ashley Gaddy Robbins speaks of the importance of preserving the federal Consumer Financial Protection Bureau at a May 29 press conference outside of U.S. Sen. Thom Tillis's Raleigh office. (Photo: Rob Schofield) North Carolina has always been a conservative, business-friendly state in which lobbyists for corporate interests have generally had their way in the state Legislative Building under both Republicans and Democrats. From the days of tobacco, textiles and furniture to the modern era in which industries like banking, technology, construction and health care predominate, it's been a rare instance in which lawmakers have said 'no' to the policy demands of a large industry – especially those willing to make significant 'investments' in political campaigns. One notable and interesting minor exception to this pattern in recent decades, however, has been in the realm of predatory consumer lending. Throughout the latter decades of the 20th Century right down to the present day, grifting high-cost lenders have generally struggled to gain the foothold here that they enjoy in many other states. Despite repeated efforts to loosen state laws that bar exploitive products like 'payday loans' and 'car title loans' and that cap interest rates and fees charged by 'consumer finance' companies and makers of high-cost home loans, North Carolina lawmakers have largely held firm. Several factors that have contributed to this situation, including consistent and forceful advocacy from the consumer protection offices of Attorneys General Mike Easley, Roy Cooper, Josh Stein, and Jeff Jackson; resistance from several legislative leaders (including a handful of Republicans like veteran State Rep. Julia Howard and former State Rep. Jeff Barnhart); and tough stances by the state's military commanders who've seen how predatory loans target and harm the readiness of their troops. Together with the rise of one of the nation's strongest networks of consumer advocacy nonprofits – a group that included, among others, advocates from the Center for Responsible Lending, the North Carolina Justice Center, the Financial Protection Law Center and the state's Legal Aid community — these forces helped keep North Carolina a state that is comparatively predatory lender-free. What's more, the successes in this area were so numerous and impactful that following the financial crisis of the early 2000's that morphed into the Great Recession, they helped inspire action in Washington to establish a watchdog federal government agency known as the Consumer Financial Protection Bureau. In the years since, the CFPB has done prodigious work – winning billions of dollars in refunds for ripped-off homebuyers, student loan borrowers, and banking customers and even putting some predatory lenders out of business. Since its inception, more than 300,000 North Carolinians have turned to the agency with complaints of consumer abuses. More than 86,000 have thus far won relief. Unfortunately, as one might expect, laws and lawyers that target grifters, scammers and predators are anathema to President Trump – a man whose business career was largely predicated on all manner of shady deals — and he and Republicans in Congress are working hard to gut or abolish the agency. According to Adam Rust of the Consumer Federation of America, since Trump returned to office in January, his minions have quickly sought to lay off virtually the entire CFPB staff (a move that has waxed and waned in the federal courts), cancelled numerous consumer protection regulations (including rules designed to protect vulnerable seniors from junk fees, rein in online payment app scams and debt collectors, and cap bank overdraft fees), and dismissed more than 20 lawsuits targeting predatory actors. Where federal law protected certain kinds of work from complete elimination – as with the Office of Servicemember Affairs (a creation of the Military Lending Act) – Rust says Trump's team evaded the law by simply firing everyone in the office except for a single person. The massive budget and tax bill recently approved by the U.S. House doubles down on this pattern by slashing the agency's funding agency by around 75%. To their credit, however, North Carolina advocates and activists – some of whom helped birth the CFPB — have no intention of letting the agency be destroyed without a fight. Last Thursday, several of them gathered for a press event outside of Sen. Thom Tillis's Raleigh office to plead with him to intervene. In addition to Rust, speakers included community organizer Emma Horst-Martz, who cited her grandmother's victimization by an online tech firm as an example of the need to preserve protections for seniors, and a pair of small business women – Ashley Gaddy Robbins and LaCharo Owens – both of whom explained the critical role CFPB protections have played in making access to safe, affordable credit possible for minority and women-owned businesses. Is there a chance that Tillis could muster the courage, as is his wont every once-in-a-blue-moon, and do the right thing? Experience and a glance at some of his past actions indicate that it's a huge longshot, but with an uphill reelection race looming in 2026, it seems at least possible that Tillis will see handing such an issue to a Democratic challenger could be a dangerous move. For their part, the activists and small business owners who pleaded with him last week will not be giving up or going away. Their simple message: stand with the people of North Carolina, not the banks, billionaires and lobbyists. Let's fervently hope Tillis was listening.
Yahoo
23-05-2025
- Business
- Yahoo
Moore allows payday loan bill, other measures to become law without his signature
Gov. Wes Moore (D) will allow a handful of bills to become law without his signature rather than issue vetoes. (File photo by Bryan P. Sears/Maryland Matters) A bill meant to regulate so-called 'earned wage access' loans for the first time in Maryland will become law without the governor's signature and over the objections of a coalition that strongly opposed it. House Bill 1294 is one of a handful of bills that Gov. Wes Moore (D) will allow to become law without his signature, including a measure to clarify provisions of a clean-energy building standard and other to increase oversight of the Department of Information Technology. Moore cited beneficial elements for each bill, but also pointed to provisions that were potentially troublesome, leading him to withhold his signature. The bills are the last gasp of a month in which the governor signed almost 800 bills from the 2025 General Assembly into law and they come a week after he announced vetoes of 23 measures, including his controversial veto of a bill to create a commission to study possible reparations. Lawmakers are expected to override that veto, if not others. In Maryland, there is no pocket veto for the governor, who must veto a bill to reject it. Of the left-over bills, the most contentious may have been HB1294, which aims to regulate 'earned wage access' programs that advance workers money they have earned but have not yet received, then requires them to pay it back with interest. Critics say the bill as drafted exempts app-based lenders from state laws that 'prohibit lending that is discriminatory, is deceptive, or carries extremely high interest rates.' The Center for Responsible Lending said in a statement that the new law makes it easier for Marylanders to be sucked into 'financial quicksand' because of payday loan apps. 'The bill becoming law but without the governor's signature is indicative of serious, widespread concerns about these payday loan apps, including from the governor's administration,' said Whitney Barkley, deputy director of state policy and senior policy counsel for the Center for Responsible Lending. Moore to veto reparations bill, one of a list of measures he will reject The center was part of a coalition of more than three dozen advocates, including the NAACP Maryland State Conference, that had urged Moore to veto the bill. Earned wage access programs typically come in two versions – one offered by employers to their employees and another offered by private companies directly to workers. The loan is typically paid back through automatic deductions, usually with a fee or 'tip.' Opponents said the tips are finance charges. Often those charges exceed 300% interest, higher than the state's 33% limit. They said the new law 'removes the best defense against predatory lending' in Maryland. In a letter explaining his decision, the governor said early access to earned wages can 'provide a tangible benefit to workers' with unexpected expenses such as flat tires, medical copays and veterinarian bills. While he commended lawmakers, including House Economic Matters Chair Del. C.T. Wilson (D-Charles), for 'advancing a path on regulating these products,' Moore also acknowledged concerns with the bill. Roughly 345,000 residents used wage access apps more than 11 million times between 2019 and 2024, in transactions totaling about $108 million. Nearly one in four accessed the service every two weeks, 'suggesting habitual use,' Moore wrote. About half pay 'expedited fees.' Those who default on the loans tend to be 65 or older, earning less than $50,000 a year and users tend to live 'in the lowest income communities in the state,' Moore wrote, adding that 'protections are warranted.' He called for a cap on amounts that can be borrowed from a single or multiple lenders, and said the law should not exempt lenders from existing commercial financial protection laws. Finally, soliciting a tip for a loan 'is inappropriate,' Moore wrote. SUPPORT: YOU MAKE OUR WORK POSSIBLE The governor also took a pass on House Bill 49, which would help clarify key provisions of the Building Energy Performance Standards. Some building owners could receive credits, including for generating renewable energy on-site. The bill was requested by the Department of the Environment, Moore withheld his signature over changes made by the legislature. In a letter explaining his decision, Moore cited 'constrained (budget) resources' and 'significant operational challenges' for the department, which must implement the law. 'And overall, this bill, as amended by the General Assembly, undermines the Department's regulatory flexibility to meet the climate goals set out in the Climate Solutions Now Act,' Moore wrote. The bill, as requested by the department, was intended to provide flexibility to building owners who must comply with electrification requirements and reach net-zero greenhouse gas emissions by 2040. Failure to do so will result in fees — some as much as $600,000 for poor performing buildings — levied by the Maryland Department of the Environment. But lawmakers amended the bill to exempt hospitals and some manufacturing facilities. Also exempted are emissions associated with steam sterilization and back-up generators at medical facilities, nursing homes and laboratories. Senate committee considers taming IT department as part of ongoing budget effort Moore said he is also 'concerned with the study requirement included in the bill,' which calls on the department to analyze other potential changes to the BEPS program. The governor said the amended bill 'introduces uncertainty into an already complex regulatory effort … It is not clear that the expectations of this study can be met by the department, given the fiscal constraints and timeline challenges the law has put in place.' Moore will also allow House Bill 738 and Senate Bill 705 to become law without his signature. The identical bills — sponsored by Del. Anne Kaiser (D-Montgomery) and Sens. Sens. Katie Fry Hester (D-Howard and Montgomery) and Stephen S. Hershey Jr. (R-Upper Shore) — aim to refocus the Department of Information Technology on major projects and ensure compliance with auditors' recommendations. The law imposes new oversight and reporting requirements on a department who has come under fire from lawmakers and the Office of Legislative Audits. One top lawmaker characterized the agency as a money pit. A key part of the bill expands and defines the responsibilities of the department secretary on oversight of major IT projects, and it bars the department from contracting for IT services or products that are not consistent with its master plan. The law also requires the department secretary to meet quarterly with the chief information officer of agencies or departments with planned or ongoing IT projects. It also sets up an expert panel to advise the legislature on IT issues and requires the Senate Budget and Taxation and House Health and Government Operations committees to convene a work group to evaluate the bill and other potential changes. The work group will determine if other actions are needed to resolve issues raised by the auditor. Moore, in a three-page letter, said he agreed that changes needed to be made to how major information technology projects are overseen. But while the bills are 'well-intended,' he said 'many of its provisions recycle ineffective policies from the past, mirror reforms that are already underway or are overly prescriptive.'
Yahoo
15-05-2025
- Business
- Yahoo
What are instant loans? Everything you need to know
Instant loans are quick, but they often come with extremely high fees and predatory terms. Consider alternatives, like debt negotiation or a bad credit loan, before turning to instant options like payday loans. Review any loan contract carefully to ensure you understand the terms and that it complies with your state's laws and regulations. An instant loan can get you cash quickly — sometimes within the same day — even if you don't have strong credit. However, the sky-high interest rates and sizable fees can make instant loans challenging to repay and may even trap you in a cycle of debt. A few extra dollars may not seem like much, but they can add up quickly and translate to a high APR. These adverse effects can be even more detrimental for low-income borrowers. In the states that allow these types of loans, payday lenders extracted $2.4 billion in fees from low-income borrowers in 2022 alone, according to the Center for Responsible Lending. If you're already struggling to keep up with bills, the high cost of an instant loan may lead to additional financial distress. An instant loan is a short-term loan for a small sum that comes with high interest rates and fees. Borrowers often turn to them when they need to cover an emergency expense, like a car repair or other unexpected bill, but have little or no savings. Depending on state laws, these short-term loans are available in a few varieties: payday loans, pawn shop loans and car title loans. Payday loans: A payday loan doesn't require collateral and may offer cash on the spot. You must repay the loan (plus high interest fees) by your next pay period, typically within two weeks. They're a common instant loan option — 12 million Americans use them yearly, and many borrow more than one. Pawn shop loans: A pawn shop loan, or pawn loan, is a secured loan. The pawn shop holds an item you own as collateral for the loan. In exchange for the item, you receive a loan in a lesser amount than the collateral's value. If you don't return to repay the loan by the payment date, the pawn shop will claim ownership of the item and potentially sell it. Car title loan: Also known as a pink slip loan, this form of financing is secured by your vehicle's title. You still get to drive your car, but you'll need to repay the loan in full, including interest fees, by the due date. If you don't repay it on time, the lender can repossess your car. Fast approval and funding timelines can make instant loans attractive, but regardless of the type of instant loan you're considering or what a lender calls it, an instant loan is a high-risk borrowing option. Consider all alternatives carefully first before turning to an instant loan. In most situations, instant loans aren't a good idea and should be avoided if possible. Along with steep costs, the short repayment period and potential damage to your credit can make them difficult to manage. A typical payday loan APR (annual percentage rate) is 400 percent — and there are few new laws regulating the amount a lender can charge. This means if you need to borrow $400, you might pay an extra fee of $60 to get the funds you need today. The fee on its own may seem nominal, but borrowing costs can add up quickly if you're unable to repay what's owed on the due date. Lenders generally require access to your bank account to initiate repayment when the loan becomes payable. If you don't have enough money in your bank account, the lender will still try to transfer funds. This can lead to overdraft fees from your bank — and potentially a non-sufficient funds fee from your lender. If a loan rollover or extension isn't offered in your state, you'll likely continue to incur penalties until your bank account balance is high enough to cover the full loan amount, increasing the total cost of borrowing and sinking you deeper in debt. If you're already facing financial hardship, it may be challenging to repay the loan and any applicable interest and fees within such a short timeframe. In fact, four out of five payday loan borrowers roll over or renew their loans within 14 days, according to the Consumer Financial Protection Bureau (CFPB). Unfortunately, this option comes at a cost, and continuous rollovers or renewals could cause the fees to balloon. Using the earlier example, if the lender charges $60 per rollover and you extend the loan twice, the balance will increase to $520 in just one month. And qualifying for a debt consolidation loan to pay off your instant loans and prevent a buildup of fees can be difficult if your credit isn't in good shape. Payday loan default is unfortunately far from uncommon — one in five borrowers defaults on their payday loan, according to the CFPB. If your loan goes into default, the negative event will be reported to the credit bureaus and you'll have to deal with debt collectors. Collection accounts can tank your credit score and linger on your credit reports for up to seven years. Debt collectors can also sue you to recoup the outstanding funds. If the court rules in their favor, your wages might be garnished. The application process is the same for most instant loans: You submit an application and, if approved, sign a contract that states the cost and due date. APRs on these loans are incredibly high, sometimes going well into the triple digits. Fees vary by state, and each state has its own limits. The rates are high because lenders consider these to be high-risk loans. Submit an application. Payday loans don't typically require a credit check, but the lender will require proof of income and a bank account. You can find both online and in-person lending options, depending on where you live. Give a postdated check or ACH authorization. If you apply for an instant loan online, your lender will likely require an ACH (Automated Clearing House) authorization from your bank account. Storefront lenders may require a postdated check with the loan's due date and the amount you owe. Receive your loan funds. The lender will provide the loan amount, excluding fees, as a lump sum in cash. An online instant loan might be directly deposited into your account, if you've granted access. Repay the loan by the due date. The repayment term for a payday loan is about two weeks, or the date of your next paycheck. This also varies by lender and the details of the loan agreement. When it's time to repay the loan, you'll pay the loan amount and any relevant fees. If you can't repay the loan on time, some payday lenders offer a rollover option to delay repayment for another pay period. Not all states allow rollovers, and this option costs another fee. The CFPB found that some borrowers roll their loans over so many times that the cost of fees outweigh the original loan amount. In most cases, you should only use instant loans as a last resort because they generally come with high fees and rates. Before moving forward with one, seek out alternatives with lower borrowing costs than instant loans. That way, you can lower your chances of getting stuck in a debt cycle. Negotiate a payment plan: Contact your creditor or servicer to explain your financial situation and see if they offer reduced payment plans. This may not always be an option, but it won't hurt to try to negotiate. Personal loan for bad credit: Although this option also comes with high interest rates, personal loans are still considerably less expensive. According to payday loans have interest rates between 300 and 500 percent. For context, a bad credit personal loan may have an APR of 25 to 36 percent. Plus, most personal loans offer longer repayment periods, commonly one to seven years. Family and close friends: Ask trusted family members and close friends if they're willing to give you a short-term loan. Make sure you're both clear about interest and repayment expectations, and consider drafting a written agreement. Speak with a nonprofit credit counselor: To address the root causes of your debt and make long-term plans, discuss your options with a nonprofit credit counseling agency. Their services are typically free or low-cost, and they can help you with a debt management plan so you can be prepared for unexpected expenses. Credit card cash advance: These are expensive, but not nearly as expensive or risky as instant loans. A cash advance is a short-term loan borrowed against the credit line on an existing credit card. Rates are typically much higher than your card's purchase APR, and you'll also typically pay a cash advance fee of 3 to 5 percent of the transaction amount. To avoid continued reliance on instant loans, create a budget that accounts for your income and expenses. Save up for large, planned expenses, and build an emergency fund for unexpected costs. Instant loans aren't the ideal go-to financing option to use when a big expense surprises you. Consider any alternatives before taking on the predatory fees of a payday loan. If you believe an instant loan is really your only option, read your state's regulations for payday lending. Some states impose maximum loan amounts, fee and rollover restrictions — as well as other requirements for payday lenders — to discourage predatory lending practices. To learn more about the rules in your state, reach out to your state banking regulator or attorney general. Sign in to access your portfolio
The Hill
05-03-2025
- Business
- The Hill
Two-thirds of Americans support CFPB: Poll
About two-thirds of Americans support the Consumer Financial Protection Bureau (CFPB), according to a new poll released Wednesday. Some 67 percent of Americans surveyed by the Center for Responsible Lending, a nonprofit that supports strict consumer financial regulations, said they favor the consumer watchdog, including 60 percent of Republicans, 68 percent of Independents and 84 percent of Democrats. The latest polling comes amid growing concern that the Trump administration plans to effectively dismantle the consumer watchdog. The agency's work has largely been on hold since early February, when acting director Russell Vought ordered staff to stand down from all work tasks. CFPB employees were also told not to come into agency headquarters, and the building's lease was later cancelled. The administration has insisted that it does not plan to eliminate the CFPB, pointing to President Trump's decision to nominate Jonathan McKernan as director and Vought's plans to streamline the agency. However, several current employees said in court filings last week that they were told by officials that they plan to 'wind down' the agency, eliminating all but five employees and transferring the consumer watchdog's statutorily required functions to other agencies 'The Administration's shutdown of the Consumer Bureau is wildly out of step with Americans, across the political spectrum, who want this consumer watchdog agency doing its job,' Mike Calhoun, president of the Center for Responsible Lending, said in a statement. 'Consumer Bureau rules to lower the cost of overdraft fees, lessen the burden of medical debt, and track gaps in small business lending are popular and Congress should let these rules stand,' he added. Seven in 10 Americans support the CFPB's rule capping bank overdraft fees to $5, while 66 percent back the agency's measure banning medical debt from credit reports, the poll found. Some 53 percent also support a rule requiring banks to track small business lending. The House Financial Services Committee is set to consider a resolution Wednesday to nullify the CFPB's overdraft rule. The panel's chairman, Rep. French Hill (R-Ark.), slammed the rule in his opening remarks as 'misguided,' arguing that it 'would reduce consumer choice, deny this needed service to our citizens and stifle innovation.' The Center for Responsible Lending poll was conducted Feb. 21-23 with 1,029 U.S. adults and has a margin of error of 3.1 percentage points.
Yahoo
03-03-2025
- Automotive
- Yahoo
Pete Smith of the Center for Responsible Lending on the troubling rise in prohibited car title loans
Pete Smith, Center for Responsible Lending (Courtesy photo) Car title lending. Thankfully, a lot of North Carolinians have never heard of this particular business because it's long been prohibited under state law. Unfortunately, many residents of other states are all too familiar with these frequently predatory loans in which borrowers sometimes pay interest rates of as high as 300% and face repossession of their vehicle if they miss a payment. What's more, as a new report from senior researcher Pete Smith of the Center for Responsible Lending documents in painful detail, surveys indicate that some car title lenders pay little attention to state lines. As a result, some North Carolinians have, despite our state's official ban, fallen prey to these loans and the debt trap that so often comes with them. Smith's report is entitled 'Under the radar: Evidence of prohibited Vehicle-Tile Loans made in 22 states and DC' and Newsline's Rob Schofield caught up with him recently in his California office to discuss it. Click here to listen to the full interview with senior researcher Pete Smith.
