OVERVIEW In a responsible loan market, the lenders’ profits are closely aligned to the successful repayment of the credit. Yet high-rate installment lending can lead to asymmetrical incentives:As long as the borrower pays long enough before defaulting, a high-rate installment loan will be profitable. If the borrower makes even half the payments on a longer term high-rate installment…
Civil legal aid organizations provide critical front-line services for low-income and elderly people across the country facing debt collection activity. Debt collection is a pervasive part of life in the United States. In 2014, 12 million adults had non-mortgage debts reported as past due on their credit reports and 77 million consumers had nonmortgage debts…
Credit reports and scores reflect stunning racial disparities. Study after study has found that Black and Latino communities have lower credit scores as a group than whites and Asians. The racial disparities in credit scores are due to deep structural factors, created by centuries of intentional and legalized discrimination as well as present-day biases.
This National Consumer Law Center report reviews deferred interest credit card promotions, a deceptive practice that is growing. The practice should be banned due to its unfairness, especially as financially vulnerable consumers are most likely to fall prey to the trap. Executive Summary “Deferred interest” promotions on credit cards are a trap for the unwary.…
Read More about Deceptive Bargain: The Hidden Time Bomb of Deferred Interest Credit Cards
This National Consumer Law Center survey analyzes the strengths and gaps of the statutes in 50 states and Washington, D.C. that regulate installment loans, a market that is expected to grow as restrictions on payday loans increase.
Prepaid cards are prepaid – a safe way to control spending for consumers who have had trouble with overdraft fees, have blemished credit, and may have lost their bank account. Except for prepaid cards sold by payday lenders. The largest payday lenders sell prepaid cards with unusual features that enable payday loans and profit from…
Communication technologies have changed considerably since the Fair Debt Collection Practices Act (FDCPA) was first adopted in 1977. Despite technology changes, traditional problems of abusive communications that prompted passage of the FDCPA remain rampant.
Read More about Debt collection communications: Protecting Consumers in the Digital Age
Creditors increasingly sell charged-off debts to debt buyers rather than trying to collect on the accounts themselves. Debts may then be resold again and again between debt buyers with each owner potentially attempting to collect on the accounts. Over the course of these sales and collection attempts, the debts inevitably age. Consumers are routinely confronted…
