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Car Sales & Financing Archive

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Policy Analysis

Reports and Press Releases

Comments,  Letters and Issue Briefs

Testimony

  • Testimony of John W. Van Alst on “Consumer Protection in the Used and Subprime Car Market” before the Subcommittee on Commerce Trade and Consumer Protection of the Committee on Energy and Commerce United States House of Representatives, March 5, 2009
  • Testimony Before House Financial Services Committee on the Need for Race, Age and Sex Data on Non-Mortgage Lending, July 16, 2008

Model Laws

Litigation

 



Bankruptcy Archive

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Policy Analysis

Policy Briefs, Reports and Press Releases

Testimony, Comments and Letters

Additional Resources

  • Questions and Answers about the Mortgage Modification Bankruptcy Bills (H.R. 200 and S. 61), What is the status of the bills? What is the most significant feature of the bills which would make modification for home mortgages different than under current law for other loans? Q&A
  • Six Things  Legal Services and Pro Bono Lawyers Should Know About the Attorney Provisions in the 2005 Act

Related Publications

  • Consumer Bankruptcy Law and Practice – The definitive consumer bankruptcy treatise, updated with the latest case law and changes to the Bankruptcy Code, Forms, Fee Schedules, Rules, and case law written by Henry Sommer, the nation’s leading consumer bankruptcy author, and edited by John Rao, a former member of the federal Judicial Conference Advisory Committee on Bankruptcy Rules.


Payment Fraud Archive

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Policy Briefs, Reports, & Press Releases

Comments and Testimony

Letters

Additional External Resources

Government and Regulatory Actions

Operation Choke Point Cases:

CFPB Takes Action Against Global Client Solutions for Processing Illegal Debt-Settlement Fees, Aug. 25, 2014,

FTC Settlements Crack Down on Payment Processing Operation that Enabled ‘Google Money Tree’ Scammers to Charge Consumers $15 Million in Hidden Fees [Process America], Nov. 18, 2013,

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Overdraft Loans Archive

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Policy Analysis

Policy Briefs, Reports & Press Releases

Letters

Comments

Testimony



Statement Regarding Capital One Data Breach

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FOR IMMEDIATE RELEASE: July 30, 2019

National Consumer Law Center contact: Jan Kruse (jkruse@nclc.org) or (617) 542-8010

Boston – Chi Chi Wu, staff attorney at National Consumer Law Center, issued the following statement and advice to consumers about the Capital One data breach:

“It’s disappointing but not unexpected that consumers face yet another breach of our sensitive financial information. By now, consumers should assume there is a good chance their Social Security number and other information is out there in the hands of hackers. People should take the most effective measure to prevent identity theft involving new credit accounts by freezing their credit reports. It’s free as a result of a new law last year. Just freeze it!”

“In fact, to improve security, our credit reports should be frozen automatically, by default, until you are ready to apply for credit. A freeze by default would give consumers much better control over their private financial data.”

“With respect to existing bank accounts and credit cards, federal law does protect you if there is theft or unauthorized use on them. For credit cards, consumers are not liable for any unauthorized use over $50 and banks typically waive that $50. For bank accounts, they generally are not liable for unauthorized debit card or other electronic transactions if they report the unauthorized charge within 60 days of their statement. (Lost or stolen debit cards or other access devices must be reported within two business days of learning of the loss or theft to avoid liability on subsequent charges.) Consumers should carefully check their credit card and bank account statements or their online accounts, and immediately report any suspicious transactions.”

For more information on credit card and bank account rights, see NCLC’s consumer fact sheets:

Your Credit Card Rights

Protections for Debit Card and Electronic Transactions



National Consumer Law Center and the Consumer Federation of America Urge CFPB to Maintain Ability to Repay Determinations for All Mortgage Loans

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FOR IMMEDIATE RELEASE: July 25, 2019

Contacts:
National Consumer Law Center: Jan Kruse (jkruse@nclc.org) or (617) 542-8010
Consumer Federation of America: Barry Zigas (bzigas@consumerfed.org)

Washington, D.C. – Advocates at the National Consumer Law Center and the Consumer Federation of America issued the following statement today in response to the Consumer Financial Protection Bureau’s (CFPB) announcement of an Advance Notice of Proposed Rulemaking regarding the Dodd-Frank Act ability to repay and qualified mortgage rules.

“The Consumer Financial Protection Bureau’s announcement today represents an opportunity to ensure that the mortgage market is accessible to a diverse range of homeowners, but it also risks increasing consumer harm. We urge the CFPB to ensure that lenders remain required to determine that borrowers have a reasonable ability to repay their loans, a basic premise of responsible underwriting. Only when lenders have made a reasonable determination of a borrower’s ability to repay should they be shielded from liability.

“The Dodd-Frank Act ability to repay rule remains a bulwark against the market excesses that brought us the recent financial crisis, a calamity from which many communities, especially low-income neighborhoods and communities of color, still have not recovered. Providing sustainable mortgage credit to these communities will require both adjustment of the CFPB’s ability to repay rules and an examination of the broader market forces constraining credit.  In any adjustment to the standards for determining a borrower’s ability to repay, a revised rule must continue to hold at the forefront the prevention of harm to consumers in the form of the extension of improvident, risky, unaffordable loans. Because the racial wealth gap widened as a result of the foreclosure crisis, any new rule also must ensure that it helps and does not harm homeownership in communities of color through adoption of limits or tests that further, rather than reduce, historic discriminatory practices.

“Following the global market collapse in 2008, which was fueled by the worst foreclosure crisis our nation has ever experienced, Congress mandated that lenders make a reasonable determination that borrowers have an ability to repay the loan, reacting to widespread underwriting failures in the run-up to the Great Recession. Congress provided that the safest loans could receive a presumption of compliance with this ability to repay determination, provided that lenders complied with ability to repay rules issued by the Bureau.  These loans are known as “qualified mortgages.”

“We urge the Bureau to continue to require that all lenders make a determination of the borrower’s ability to repay, as required by the statute, rather than substituting loan price alone for an assessment of ability to repay, as some have urged. Loan price limits combined with the statute’s product limitations may hold defaults low statistically, but will not prevent equity-stripping loans from being made to cash-poor but house-rich consumers, for instance.  Financial regulators have long condemned equity-stripping lending as an unfair and deceptive practice, which led directly to the loss of wealth in communities of color in the foreclosure crisis.

“The Bureau’s ability to repay rule could expand access to credit without promoting risky lending practices through a variety of means including:

  • establishing a measure of affordability based on cash flow, which lenders could use in making qualified mortgages;
  • raising the debt-to-income ratio from its current 43% level in concert with additional compensating factors and underwriting measures;
  • carving out riskier loans, such as adjustable rate loans and high-cost mortgages, from the qualified mortgage liability safe harbor for lenders;
  • reducing regulatory burden by revising and simplifying the Bureau’s existing rules for defining income and debt (“Appendix Q”); and
  • providing a rebuttable presumption rather than a safe harbor for all borrowers, an approach more consistent with the statute.”


U.S. General Accountability Office Report Misses the Mark on Income-Driven Repayment Plans

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FOR IMMEDIATE RELEASE: July 25, 2019

National Consumer Law Center contacts: Persis Yu (pyu@nclc.org) or Jan Kruse (jkruse@nclc.org); (617) 542-8010

 

U.S. General Accountability Office Report Misses the Mark on Income-Driven Repayment Plans

BOSTON- Today, the U.S. Government Accountability Office (GAO) released a report on the Department of Education’s process for verifying income and family size when determining income-driven repayment amounts.

For student loan borrowers struggling to repay their loans, income-driven repayment (IDR) plans are a lifeline that helps millions of people stay out of default. These programs allow borrowers to make payments based upon their income and family size. Government data shows that borrowers in IDR plans have lower delinquency rates than those in other repayment plans.

“Income-driven repayment works. Low-income borrowers need an easier path to income-driven repayment—not more bureaucracy,” said Persis Yu, director of National Consumer Law Center’s Student Loan Borrower Assistance Project. “The priority needs to be ensuring that student loan payments are affordable and accessible.”

Even though IDR is a vital lifeline for borrowers, a 2017 Consumer Financial Protection Bureau study found that a number of problems were keeping borrowers from accessing it. Research from the Department of Education revealed that more than half of borrowers in IDR plans did not complete their annual recertification on time, which can lead to a dramatic increase in payment amount, and ultimately default. The consequences of default, including wage garnishment, seizure of federal benefits, such as Social Security, and tax refunds (including the Earned Income Tax Credit) are particularly devastating to low-income borrowers and borrowers of color.

“Policymakers should implement commonsense measures, such as using the data that the government already has, to improve access to IDR for millions of student loan borrowers. We are glad to see the GAO recommend using tools, such as IRS data sharing, to improve implementation of income-driven repayment. However, its recommendation to require additional paperwork from the borrowers whom income-driven repayment is supposed to help misses the mark. This recommendation would make it harder for vulnerable borrowers to access the very programs designed to meet their needs,” said Yu.

For several years, a broad group of bipartisan policymakers and stakeholders have urged the U.S. Departments of Education and Treasury to implement an automatic recertification process that uses IRS data that is shared with the Department of Education. Such data sharing would not only improve access to and the quality of the IDR plans, but it could also be used to target benefits to borrowers who need IDR the most.

 

More Information on IRS Data Sharing

The Pew Charitable Trusts, Streamlined Data Sharing Could Help Millions Pay Back Student Loans, July 22, 2019

The Institute for College Access and Success (TICAS), A Popular Student Loan Fix Has Been Stalled for Years. It’s Time to Act, July 1, 2019

 

Related NCLC Resources

NCLC’s FOIA request to the U.S. Department of Education, July 1, 2019

Student Loan Forgiveness Cannot Work Without a Right to a Payment History, May 23, 2019

National Consumer Law Center Sues U.S. Education Department to Obtain Copy of Student Loan Servicing Contract, April 18, 2019

96 Out of 28,000 Borrowers Approved for Public Service Loan Forgiveness … What Does This Mean for Everyone Else?, October 5, 2018

Comments to CFPB on Proposal to Collect Student Loan Servicing Data (Federal and Private), April 24, 2017

Making Federal Student Loan Servicing Work for Borrowers, November 2014

Making Student Loan Servicing Work for Borrowers, June 2014



Grassroots Debt Collection Comment Card

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Roadmap: Help Strengthen the CFPB’s Debt Collection Rule!

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Consumer groups praise overwhelming House passage of strong anti-robocalls bill

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FOR IMMEDIATE RELEASE: July 24, 2019

CONTACTS:

National Consumer Law Center: Jan Kruse, jkruse@nclc.org or (617) 542-8010

Consumer Reports: David Butler, dbutler@consumer.org or (202) 462-6262

Download letter from 80 organizations across the nation sent to House Members urging passage of H.R. 3375: http://bit.ly/stop-bad-robocalls

WASHINGTON, D.C. — The U.S. House of Representatives struck a strong bipartisan blow against robocalls plaguing consumers today with a near-unanimous 429 – 3 vote to pass H.R. 3375, the Stopping Bad Robocalls Act. The bill takes major steps to curb abusive robocalling by adopting important new consumer protections including:

  • Requiring clear FCC regulations to better ensure that automated calls and texts cannot be made without the consumer’s prior consent, by directing it to clarify coverage of all technologies that enable them, to clarify consumers’ right to withdraw consent, and to close off avenues for robocallers to evade these restrictions.
  • Requiring phone companies to provide effective call authentication capability, at no charge to consumers, to better identify and stop robocalling and texting that uses deceptively “spoofed” phone numbers;
  • Strengthening FCC powers to impose forfeiture penalties for intentional violations; and
  • Requiring creation of a database that robocallers can check in order to avoid making robocalls and texts to a telephone number that has been reassigned to a different consumer who has not given consent.

H.R. 3375 was introduced jointly by Rep. Frank Pallone (D-NJ) and Rep. Greg Walden (R-OR), chair and ranking member of the House Committee on Energy and Commerce, and Rep. Mike Doyle (D-PA) and Rep. Bob Latta (R-OH), chair and ranking member of the Committee’s communications subcommittee. It builds on legislation passed earlier this year by the Senate. More than 80 organizations, representing consumers across the nation, signed a letter to House Members urging their support.

“The House is sending a strong message that it is time to stop the abuse from robocalls,” said Maureen Mahoney, policy analyst for Consumer Reports. “This bill would go a long way toward protecting people from the daily harassment of unwanted robocalls. These calls aren’t just annoying. Shady businesses and individuals are using them to steal your money and your personal information. With today’s House vote, we now look forward to seeing the strongest possible bill enacted into law.”

“This bill will stop most, if not all, unwanted robocalls,” said Margot Saunders, senior counsel at the National Consumer Law Center. “It will force telemarketers, scammers, and debt collectors who harass us with these unwanted calls to ensure they have our consent for their automated calls. And if robocallers continue to call us when we say stop, the pending legislation will hold them accountable for violating the law. It’s now time to re-engage with the Senate so we can get a strong final bill sent to the President.”

Last year, Americans received nearly 48 billion robocalls, according to YouMail, a private robocall blocking service, with 29 billion this year already as of this June. Many of these calls are made by debt collectors — in June 2019, they accounted for all of the top 20 sources of robocalls. But scam callers are an increasing problem. By one estimate, consumers lost $10.5 billion to phone scams in one single year.

Robocalls surged further after a 2018 decision from the U.S. Court of Appeals in D.C. that set aside a 2015 FCC order on the question of how to interpret the Telephone Consumer Protection Act’s ban on autodialed calls to cell phones without the called party’s consent.

Consumer Reports’ recent cover story “Mad About Robocalls?” offers an in-depth look at how the robocalls problem has reached such an epidemic level. It features a nationally representative CR survey finding that 70 percent of U.S. consumers have stopped answering their phones if they don’t recognize the number, or if the caller’s number is anonymous. Sixty-two percent said they let most calls go to voicemail, and 53 percent said they have educated family members about potential threats and scams from robocalls and how to protect themselves.