Updates

November 6, 2020

 

How the White House Rolled Back Financial Regulations

"Under President Trump, agencies have eased bans on Wall Street risk-taking and loosened consumer protections and anti-discrimination laws."

Article by Emily Flitter, Jeanna Smialek and Stacy Cowley | The New York Times, November 6, 2020

 

October 4, 2020

 

[NM] Proposal renews debate on payday loans

"Three years after state lawmakers approved a bill that capped small-loan interest rates at 175%, a prominent Santa Fe-based think tank is proposing that the cap be lowered significantly – to 36% – and financial literacy classes be made a graduation requirement for high school students statewide."

Article by By Dan Boyd / Journal Capitol Bureau Chief | Albuquerque Journal, October 4th, 2020

 

August 30, 2020

 

The Fintech Debt Trap: Online lenders are preying on desperate borrowers and could trigger a new consumer financial crisis

"The economic cataclysm brought on by the coronavirus caught American consumers in an extremely precarious position — one that was evident well before more than 50 million people filed for unemployment. By the end of last year, Americans had racked up nearly $4.2 trillion in consumer debt, not including mortgage debt — a record high. The greatest contributor to this surge was not credit card spending or student debt or auto loans, but something newer and, for many borrowers, even riskier: high-interest personal loans, increasingly offered by online financial technology companies known as 'fintechs.'"

Article by Alyssa Katz | The Intercept, August 30, 2020 in partnership with TypeInvestigations

 

August 28, 2020

 

Here's Why Vets Need to Avoid Predatory Lenders More Than Ever

"After hitting a recent low, the national unemployment rate is once again a source of major concern for veterans in the job market. And that’s why it’s more important than ever for veterans and military members facing financial difficulties to know the dangers of one easy-seeming financial solution that could bring major problems down the road: payday loans."

Article by Mike Saunders | Military.com, August 21, 2020

 

August 26, 2020

 

Americans are falling through the safety net. The government is helping predatory lenders instead.

How the Trump administration is betraying financially vulnerable people in the pandemic.

"You might think that right now is not a good time to make it easier for predatory lenders to take advantage of people and trap them in impossible-to-escape debt cycles. And yet."
Article By Emily Stewart | VOX, emily.stewart@vox.com | Aug 26, 2020

 

August 20, 2020

 

AG Becerra Challenges FDIC Rule that Allows Predatory Lenders to Bypass State Interest-Rate Caps

SACRAMENTO – California Attorney General Xavier Becerra today, leading a coalition of eight attorneys general, filed a lawsuit challenging the Federal Deposit Insurance Corporation’s (FDIC) final rule that creates a loophole allowing predatory lenders to evade state laws that forbid excessive interest-rate charges.

The complaint is submitted by the Attorney Generals of CA, DC, IL, MA, MN, NJ, NY and NC.

Press Release, State of California Department of Justice, August 20, 2020

 

June 10, 2020

 

Advocates Praise Rent-a-Bank Ruling Upholding State Interest Rate Caps

Colorado Court Follows “Madden” Decision that Banks Can’t Assign Bank Privileges to Nonbank Lenders

Washington, D.C. – Consumer advocates praised yesterday’s ruling by a Colorado court upholding the Colorado Attorney General’s claim that an online lender, Marlette Funding (dba Best Egg), must abide by Colorado’s interest rate limits when it purchases loans originated by a bank, Cross River Bank, that is exempt from the state’s rate caps.

Press Release, National Consumer Law Center, June 10, 2020

 

June 5, 2020

 

Advocates Praise D.C. Attorney General Suit Against Predatory High-Cost Rent-a-Bank Lender

Elevate charged 99% to 251% APR despite D.C.’s 6% to 24% rate cap

Washington, D.C. – Consumer advocates praised today’s announcement by District of Columbia (DC) Attorney General Karl Racine that he has filed a lawsuit against online lender Elevate for making loans up to 251% in DC and trying to launder its loans through two banks to avoid DC’s interest rate caps.

Press Release, National Consumer Law Center, Jun 5, 2020

 

May 22, 2020

 

FTC Halts Deceptive Payday Lender That Took Millions From Consumers’ Accounts Without Authorization

Defendants drew repeated interest-only charges, leaving consumers to pay more than promised

"The Federal Trade Commission has charged a payday lending enterprise with deceptively overcharging consumers millions of dollars and withdrawing money repeatedly from consumers’ bank accounts without their permission. A federal court has entered a temporary restraining order halting the operation and freezing the defendants’ assets, at the FTC’s request."

Press Release, Federal Trade Commission (FTC) | May 22, 2020

 

April 21, 2020

 

Consumer, Banking Groups to Congress: Exempt Economic Impact Payments From Garnishment

Washington, D.C.  — In a letter to congressional leadership today, consumer and banking industry organizations joined together to urge lawmakers to clarify at the earliest possible opportunity that economic impact payments issued by the federal government in response to the coronavirus pandemic should be exempt from otherwise legally binding garnishment orders.

Press Release | National Consumer Law Center, April 21, 2020
Joint Consumer and Banking Trades Letter to the House and Senate: Garnishment | April 21 , 2020

 

April 10, 2020

 

FACT FINDERS: What small business loans are available through the CARES Act?

TUCSON, Ariz. (KOLD News 13) - Many individuals and small businesses are struggling to remain afloat during the COVID-19 crisis. The KOLD Fact Finders have received questions about what financial aids are available through the CARES Act. We turned to locally owned public accounting firm, BeachFleischman for answers. The company created a task force to help their clients navigate through the loans made available through the CARES Act.

Video and Article by Shaley Sanders | KOLD News 13, April 8, 2020

 

 

Letter from the Arizona Bankers Association to Governor Ducey re: summary of actions the banking community is undertaking

"Dear Governor Ducey, In response to the impact the Covid-19 pandemic is having on the economy of our state, here is a quick summary of actions the banking community is undertaking in order to support Arizonans in this time of need."
Letter to The Honorable Doug Ducey | Arizona Bankers Association, March 27, 2020

 

April 8, 2020

 

The U.S. Treasury Can and Should Ensure that Stimulus Payments Go for Families’ Food and Necessities, not to Debt Collectors

"The CARES Act protects stimulus checks from being reduced to pay certain debts owed to federal and state governments. See § 2201(d). The Act does not specifically address garnishment or bank offsets for other debts but it gives Treasury the authority to issue rules and guidance to carry out the purposes of the stimulus payments. See § 2201(a). To ensure that these funds are used as Congress intended —to help people to pay for necessities, not to help debt collectors —the U.S. Treasury Department should treat and code the payments as federal benefits payments in the same way that it handles Social Security and other federal benefits exempt from garnishment."

Policy Brief | National Consumer Law Center (NCLC), April 2020

 

 

Pastors' Letter to Arizona Governor Ducey on Title loans and COVID-19

This letter and a coalition letter facilitated by the Center for Economic Integrity were sent together on April 3, 2020

"These are extreme times and I know there is a lot of pressure on those in politics, but I would like to draw your attention to a population that I believe lacks protection from those who would exploit them. Over the last twelve years I have been working to help those who have taken out payday loans and title loans. We have eliminated payday loans in Arizona, but many are still victimized by title loan companies with interest rates as high at 204% APR."

Pastors' Letter on Title loans and COVID-19 | dated March 27 and sent on April 3, 2020

 

April 6, 2020

 

New CFPB Mortgage Guidance Does More for Servicers than Consumers

Millions of Families Could Lose Homes from Job Loss Due to COVID-19

Washington, D.C. – Late last Friday, the Consumer Financial Protection Bureau (CFPB) issued a one-sided policy guidance providing enormous flexibility to mortgage servicers while failing to ensure that distressed consumers can get access to crucial information and foreclosure-avoidance procedures.  Although styled as a response to the pandemic, the CFPB, joined by six other banking regulators, in its guidance (here and here) told servicers that the Bureau would not supervise for nor enforce violations of most of its  foreclosure prevention rules “until further notice,” regardless of whether the servicer’s actions are related in any way to responding to the COVID-19 emergency. “The CFPB lifted deadlines for mortgage servicers to act without providing similar flexibility for homeowners struggling to avoid foreclosure and is allowing lenders to start foreclosure before homeowners even receive required notices,” said Alys Cohen, staff attorney at the National Consumer Law Center.

Press Release | National Consumer Law Center (NCLC), April 6, 2020

 

 

Immediate Actions For CFPB To Address COVID-19 Crisis

The coronavirus pandemic is creating overwhelming needs. First, above all else, are the dire health problems threatening the lives of so many Americans. Second is dealing with the fallout to the economy from the abrupt halt to much business activity throughout the country. But a third crucial need, which follows closely on the heels of the second, is to shield households and families from the direct economic harms they now face. We must provide people with the safeguards they will need to cope with their financial circumstances and to protect them against harm from scams, fraud, and predatory conduct.

White Paper, addressed to the Hon. Kathleen Kraninger, Director, Consumer Financial Protection Bureau (CFPB)

By Richard Cordray, Diane E. Thompson, Christopher Peterson

 

 

As the Coronavirus Rages, Americans Deserve More than a CFPB that Chooses to Bury its Head in the Sand

"For three years, the Consumer Financial Protection Bureau (CFPB) has failed to execute its job of protecting hundreds of millions of American consumers. The repercussions of this failure are vast, and they are painfully visible in the ongoing crisis in the student loan market and its effects on the most vulnerable consumers."

Post by Seth Frotman | Student Borrower Protection Center, April 6, 2020
Issue Brief: Private Student Loan Oversight Amid the Coronavirus Pandemic

 

 

Coronavirus Emergency: Why States Need to Act Now to Protect Families' Stimulus Payments

"As a result of the $2.2 trillion CARES Act, the federal government will issue stimulus payments to millions of income-qualified Americans. The purpose of the checks is to help people pay for food, utilities, rent, medicine, and other basic necessities at a time when many have been told to stay home and have lost or will lose income. Garnishment of these funds by creditors represents a threat to families’ livelihood and public health, with an estimated 47 million Americans projected to lose their jobs."

Why States Should Protect Families' Stimulus Payments | National Consumer Law Center (NCLC), April 2020

 

March 30, 2020

 

Credit Reports and the COVID-19 Crisis: What States Should Do to Help Consumers

"The COVID-19 crisis will damage the credit reports of tens of millions of consumers, who will see their scores nosedive because of mass unemployment and loss of income. Lower credit scores will impede consumers’ ability to get affordable credit, jobs, housing, and to generally recover when this crisis is over.

Yet the response to this looming credit reporting calamity in the March 2020 federal stimulus bill was meaningless window dressing. The credit reporting provision in Section 4021 of the stimulus bill is weaker and more deficient than even the middling current industry practice for disaster victims. Not only does the credit reporting provision do barely anything to protect consumer's credit records from the devastating economic effects of this crisis; it may end up harming consumers more than it helps."

Credit Reports and the COVID-19 Crisis | National Consumer Law Center (NCLC), March, 2020

 

 

Coronavirus Emergency: Consumer Debt Collection Lawsuits - How States Can Help

"Lawsuits are a common method used to collect alleged consumer debts, and these lawsuits make up a large percentage of the civil court docket around the country.Court traffic creates a substantial risk of spreading the virus to litigants, attorneys, court personnel,and the public."

Consumer Debt Collection Lawsuits | National Consumer Law Center (NCLC), March, 2020

 

March 27, 2020

 

Banks Should Not Read Federal Regulators’ COVID-19 Small Dollar Loan Guidance as Permitting Payday Loans

"On March 26, 2020, five federal agencies (the OCC, FDIC, Federal Reserve, CFPB, and National Credit Union Administration (NCUA)) issued brief joint guidance to “specifically encourage” financial institutions to offer “responsible small-dollar loans” to both consumers and small businesses during the COVID-19 crisis. This guidance contains troubling language that could be read to permit banks to make payday loans. Banks should not read it that way and should stay out of the business of payday lending."

Research & Policy and statement | Center for Responsible Lending, March 27, 2020

 

March 25, 2020

 

Arizona Gov. Ducey must issue 'stay-at-home' order to slow coronavirus

"It is time for Arizona Gov. Doug Ducey to do what other states have already done: Issue the stay-at-home order.

His refusal to act comprehensively puts Arizonans in danger. He should heed the words of Cara Christ, the interim director of the Arizona Department of Economic Security, who followed him at the podium at a briefing Wednesday afternoon:

'As you know, Arizona is still in the opening stages of its COVID-19 outbreak and the number of cases within the state will increase significantly,” Christ said. “COVID-19 is highly contagious, serious and in some cases fatal.' ”

The Arizona Daily Star Editorial Board | March 25, 2020

 

March 24, 2020

 

Major Consumer Protections Announced in Response to COVID-19

A new NCLC Digital Library article lists a growing number of actions federal and state agencies and companies are taking to respond to the COVID-19 epidemic: suspensions on foreclosures, evictions, and terminations on telecommunications and utility service, elimination of interest and forbearance on student loan payments, and more.

NCLC Digital Library | March 24, 2020

 

 

Attorney General Brnovich and Senator Sinema Issue Warning Regarding New COVID-19 Senior Scams

"PHOENIX – Attorney General Mark Brnovich and Senator Kyrsten Sinema are teaming up to remind Arizona seniors to be on the lookout for new COVID-19 related scams. Both offices have reported an increase in communications from concerned Arizonans. Fake miracle cures and events, shopping thieves, door-to-door sanitization services, robocalls, official-looking phishing emails, and government impostor scams are all on the rise as the unethical try to gain access to the financials of Arizona seniors. Con artists frequently take advantage of headlines and are currently exploiting the anxieties of vulnerable seniors over COVID-19."

Press Release | Office of Attorney General, March 23, 2020

 

 

Surviving Debt: Expert Advice For Getting Out of Financial Trouble

The National Consumer Law Center is now offering free access to the digital edition of NCLC’s most comprehensive guide to navigating debt for consumers, credit counselors and consumer advocates.

NCLC Digital Library | March 24, 2020.  Start reading here.

 

March 20, 2020

 

AG asks lenders for 90-day grace period because of coronavirus

"Arizona Attorney General Mark Brnovich issued a letter urging lending agencies in the state to waive payments on loans for up to 90 days in the wake of the coronavirus pandemic."

Article by Jerod MacDonald-Evoy | AZ Mirror, March 19, 2020

 

Which refers to Attorney General Mark Brnovich’s tweet of March 19, 2020 and his letter.
I am urging all financial and lending institutions who serve Arizonans to provide temporary and economic security to their customers in financial hardship during this unprecedented health emergency.

 

 

Proactive Measures To Protect Against COVID-19

Governor Douglas A. Ducey issued a declaration of Public Health Emergency due to the necessity to prepare for, prevent, respond to and mitigate the spread of the 2019 novel coronavirus (COVID-19). See also the Governor's Executive Orders page for subsequent related actions.

 

This Executive Order also instructs the Department of Health Services and Arizona health regulatory boards to prohibit, investigate and take action against price gouging by any healthcare professional or healthcare institution in relation to COVID-19 diagnosis and treatment-related services, and requires the Attorney General to investigate and vigorously prosecute complaints of consumer fraud in relation to COVID-19 diagnosis and treatment-related services under consumer protection laws.

State of Arizona Executive Order 2020-07 | Governor Douglas A. Ducy, March 11, 2020

 

March 10, 2020

 

More details emerge as [Nevada] state’s first payday loan database takes shape

"A statewide database tracking high-interest, short-term payday lending is beginning to get off the ground and possibly start documenting such loans by summer."

Article By Riley Snyder | The Nevada Independent, March 10th, 2020

 

March 2, 2020

 

New report examining the rates that all 50 states allow for $500, 6-month and $2000, 2-year installment loans

"There are now 45 states and the District of Columbia that have rate caps for a $500, six-month installment loan. The median rate cap among those that cap rates is 38.5% APR.  That is a rise from the previous median of 36.5% but that is because two more states (Ohio and New Mexico) now have rate caps, but high ones.   Of these 46 jurisdictions, 20 states and DC cap the APR for a $500 six-month loan at 36% or less.  As for the $2,000 two-year loan, 42 states and DC impose rate caps, at a median of 31%. Of those, the great majority— 32 states and DC—cap the APR at 36% or less.  There are several charts in the report, including on page 14 a breakdown of all 50 states.  The report also has recommendations for states."

Report | "Predatory Installment Lending In The States", NCLC, February 2020

State Rate Caps for $500 and $2,000 Loans | NCLC, February, 2020

 

February 18, 2020

 

New Research Proves Payday Lenders Obtaining Arrest Warrants for Thousands of Low-Income Borrowers

Many High-Cost Lender Collection Lawsuits Drag On For Years and Account For More Small-Claims Court Cases Than All Other Plaintiffs Combined

Press Release | Consumer Federation of America, February 18, 2020

Report | "Unwarranted: Small-Claims Court Arrest Warrants in Payday Loan Debt Collection", Christopher L. Peterson & David McNeill, February 2020

 

February 4, 2020

 

Legal loan sharks, rejoice! The campaign to put you out of business in Arizona is dead

Opinion: A proposal to lower the cap interest rates is dead, priced out of participating in democracy. Meanwhile, the payday loan industry's proposal to eliminate any caps on interest is go, go, go.

"Arizonans for Fair Lending pulled the plug on the proposed ballot initiative on Monday, saying hurdles the Legislature has set up in recent years to get to the ballot have made the race just too expensive to run."

Article by Laurie Roberts | Arizona Republic, azcentral, February 4, 2020

 

 

New Poll: Bipartisan Support for Stopping Predatory High-Interest Loans

Morning Consult conducted a survey, commissioned by Center for Responsible Lending (CRL), of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps.

CRL research publication | February 3, 2020

 

January 13, 2020

 

The Sky Doesn't Fall: Life After Payday Lending in South Dakota

"DURHAM, N.C. – Today the Center for Responsible Lending (CRL) released a report analyzing the impact of a 36% interest rate cap on South Dakota following its 2016 passage by ballot measure. The Sky Doesn’t Fall: Life After Payday Lending in South Dakota finds that some South Dakotans are still suffering the harmful consequences of predatory payday lending from before the rate cap was enacted in the form of aggressive debt collections. But much lower cost options for meeting cash shortfalls are available in the state, and the storefronts that once peppered cities and towns have been replaced by productive businesses. Two years after passage, South Dakotans still voiced strong support for the 36% cap and opposed attempts to undermine the measure."
Press Release | Center for Responsible Lending, January 13, 2020
New CRL Report | Charla Rios, Diane Standaert, Yasmin Farahi, CRL, January 2020

 

 

Read our 2019 Updates here.