Today, the CFPB released a report about a form of home seller financing called “contract-for-deed” financing, under which the seller agrees to turn over a home’s deed only after the buyer completes a series of payments. The report found that such deals often involve inflated home prices, high interest rates, and balloon payments — and […]
Category Archives: Predatory Lending
Today, ProPublica published a story about the lending activity of the Lac du Flambeau Band of Lake Superior Chippewa Indians, a Wisconsin tribe whose various companies generated than 2,200 consumer complaints to the FTC since 2019 — more than any other tribe in recent years. The Tribe’s affiliated entities regularly issued online loans with annual […]
The Consumer Financial Protection Bureau is ready to take on predatory lending again. After the payday lenders association delayed a rule for years with a lawsuit challenging the regulation as well as the bureau’s constitutionality – a challenge the payday loan industry recently lost before the Supreme Court – the CFPB is bringing payday protections […]
Some years back, I had major surgery. When I woke up after the surgery, I was on fentanyl for pain relief. The following day, I was stepped down to morphine. Morphine was less effective at blocking the pain, but the staff explained that it was too risky to keep me on fentanyl. And in the […]
Consumer Financial Protection Bureau, Predatory Lending
NCLC’s Lauren Saunders on payday lenders’ vow to continue battling the CFPB rule: “It’s a sign of how fundamentally predatory your business model is, that after they’ve made unaffordable loans and put people into a debt trap, they can’t even comply with a rule that merely prevents them from continuing to hit people’s accounts.”
That quote appears in an article by Polo Rocha in the American Banker headlined After loss at Supreme Court, payday lenders vow to keep fighting CFPB (behind paywall but available on Lexis). As the article explains “The CFPB rule, which has never taken effect, would prohibit payday lenders from making another attempt after a payment fails […]
The Center for Responsible Lending has issued a report, Not Free: The Large Hidden Costs of Small-Dollar Loans Made Through Cash Advance Apps. Here’s the Executive Summary and Key Findings: Earned wage advances (EWA) and cash advance products are small, short-term loans that are typically repaid on the consumer’s next payday either directly from a […]
The Michigan Senate yesterday passed bills to cap interest rates on quick-cash loans at 36% annually. Currently, Michigan allows short-term, high-interest cash advance loans that come due on the borrower’s next payday, with an annual interest rate of up to 391%. Supporters say that the bills, if signed into law, would protect people from getting […]
The California Attorney General brought claims against for-profit online college Ashford University and its parent company for violating the state’s unfair competition and false advertising laws by making false and misleading statements to prospective students. The trial court agreed with the AG, and imposed over $22 miillion in civil penalties. Yesterday, an intermediate appellate court […]
Carlie Malone and Paige Marta Skiba, both of Vanderbilt, have written Installment Loans. Here’s the abstract: Installment loans have increasingly replaced traditional payday loans in the short-term, small-dollar credit market. Installment loans, often offered by the same lenders who provide payday loans, have larger principal amounts, longer repayment periods, and lower interest rates relative to payday […]
Carrie Floyd of Michigan has written New Tech, Old Problem: The Rise of Virtual Rent-to-Own Agreements, forthcoming at 65 Boston College Law Review 3 (2024). Here is the abstract: This Article explores how fintech has disrupted the traditional rent-to-own (RTO) industry, giving rise to new, virtual RTO agreements (VirTOs). These VirTOs have enabled the RTO […]