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Staying Ahead of the Latest Lending Abuses 

CRL’s president, Mike Calhoun, left; Pamela Horowitz, Julian Bond’s widow, center; and Wade Henderson, event chair, right, reveal a portrait of Julian Bond at the event celebrating the launch of the Julian Bond Institute for Financial Equity Research.

A debt trap by any other name is still a debt trap. Predatory lending—characterized by excessive fees, debt traps and financial tricks—is operating under new names and in new arenas today, but the methods are familiar to Self-Help’s affiliate, the Center for Responsible Lending (CRL). For decades, CRL has been fighting predatory lending through cutting-edge research, coalition-building and nonpartisan advocacy. Working with partners, CRL has helped families buy more affordable homes, avoid preventable foreclosures, steer clear of predatory payday lenders and much more. 

Many abusive lending practices are now migrating to digital platforms and emerging business sectors, such as rooftop solar lending. Fighting for reforms is particularly challenging today as efforts are underway to weaken consumer protections. But CRL had many successes in 2024, including these highlights:

Exposing the True Costs of Small Dollar Loans: CRL issued two reports (“Not Free” and “Loan Shark in Your Pocket”) documenting the hidden costs of short-term cash advance products, often accessed through smartphone apps. This is part of larger advocacy for fair terms on small loans, including decades of state-by-state work fighting debt-trap payday loans. Twenty states have now implemented a cap on small loans, preventing unscrupulous lenders from charging effective interest rates as high as 400%. CRL also continued to lead the fight against “rent-a-bank" schemes that allow predatory lenders to partner with banks to evade state laws on interest rate caps.  

Protecting and Expanding Homeownership: Early in 2024, the Federal Housing Administration (FHA) rolled out a payment supplement that CRL had recommended, helping more than 250 families with seriously delinquent loans save their homes from foreclosure while stabilizing communities and reducing taxpayer risk. CRL also successfully advocated to reduce FHA mortgage insurance premiums for new homeowners. 

Shining a Light on Predatory Solar Financing: In July, CRL released a paper revealing predatory methods used by some residential solar energy financing lenders. The report found that many of the predatory tactics mirror the same methods employed in the 2000s subprime mortgage lending market, including undisclosed profit arrangements with their preferred solar system installers and expensive financing with hidden fees.

JBI president, Mitria Spotser, delivers remarks at JBI’s inaugural event: Honoring an Icon.

A New Institute Addresses the Racial Wealth Divide 

Last year was a time of extensive planning for an exciting new initiative: CRL’s launch of the Julian Bond Institute for Financial Equity Research (JBI), named for the civil rights icon who was also a founding CRL board member. JBI will focus on collaborative research projects to gain an in-depth understanding of racial wealth disparities and develop innovative policy and product solutions for achieving more equitable financial markets. JBI opened in February this year. Find out more and sign up to get updates on this new venture! 

"Our goal is to build a financial system that is not only responsive to the needs of America’s increasingly diverse population but also embraces that diversity as an opportunity to strengthen the nation’s economy as a whole."
— Mitria Spotser, president of JBI

The Center for Responsible Lending is our research and policy affiliate. As a non-partisan, nonprofit research and policy advocacy organization, CRL works to end predatory lending and close the racial wealth gap.