Friday, February 19, 2010

Payday Loans and Banks are Targeted by the CRL

The Center for Responsible Lending

Overdraft fees and payday loans are being targeted by the Center for Responsible Lending, or CRL. Now that the economy is regrouping after the recession, the CRL is officially doing the numbers. The organization is looking to define the term "bad lending" and bring to light policies and procedures that are financially detrimental to the borrowing public. The group has developed a website that showcases the problems with lending that include everything from subprime mortgages, questionable bank policies, and payday loans.

The CRL provides data

One of the advantages of the CRL website is that consumers can see the official tallies of various sectors and states in terms of lending. For example, the group notes that there were 731,779 total foreclosures in California from the first quarter of 2008 through the third quarter of 2009. That totals up to an increase of 692% since 2006. The startling loss adds up to projections for the near future. The projected future loss in wealth of home value from now until 2012 is estimated to be $627 billion.

What costs the consumer most

The CRL also is targeting the biggest contributors to consumer cost when it comes to bank overdraft fees and payday loans. With bank overdraft fees, there are a lot of criticisms. The fees are a strong driver of bad loan costs. In the past debit cards were considered a cost-effective way of making purchases. Consumers used them to avoid overdraft fees and interest payments that come along with credit card purchases. In recent years, however, debit cards have moved into the area of money drains for consumers who aren't careful. ... click here to read the rest of the article titled "Payday Loans and Banks are Targeted by the CRL"

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