Monday, March 31, 2025

Preserve the Payday Lending Rule!

A Blog Post by the Consumer Federation of America



Barring a last-minute action by the CFPB or a court intervention, the payment provision in the Consumer Financial Protection Bureau’s (CFPB) Payday Lending Rule will go into effect on March 30th. The rule has received bipartisan support and will protect people from unfair practices. Borrowers will benefit from the rule’s prohibitions on an unfair debt collection method. Policymakers should not delay, weaken, or suspend the rule from going into effect. 

The Payday Lending Rule, proposed in 2016 and completed in October 2017, had two parts. Its “mandatory underwriting provision” (MUP) obligated lenders to document a borrower’s ability to repay the debt, required a 30-day cooling-off period after a borrower’s third consecutive loan, and called for a registry to track an individual’s usage of payday loans. It explicitly stated that lenders should consider a borrower’s expenses and not just their income when assessing an applicant’s creditworthiness.  

The second part – the payment provision – banned the practice of debiting a borrower’s account after more than two failed attempts, deeming this unfair and abusive. This provision addressed a widespread problem of payday lending: many payday lenders debit an account repeatedly, knowing that customers would incur overdraft fees, as a means to coerce repayment. Some payday lenders used the threat of overdraft and non-sufficient funds fees as an intimidation tactic to collect outstanding loan balances. In some cases, they even attempted to debit accounts that had been closed.  Pew research revealed that more than one in four payday loan customers experienced an overdraft fee due to a lender’s attempt to collect a payment from their bank account. The CFPB identified one lender that debited a borrower’s account 11 times in a single day.

As expected, the high-cost loan industry fought against the rule when it was proposed. Their attacks have never ceased, beginning with a 2018 lawsuit and lasting to this moment. While the rule was not challenged with the Congressional Review Act (CRA), the industry kept up the pressure. When the CPFB’s leadership changed with the transition to the first Trump Administration, payday lenders found a more friendly ear for their concerns. In 2018, Acting Director Mick Mulvaney asked for a delay in the rule’s implementation pending the lawsuit’s outcome. On February 6th, 2019, the CFPB announced it would propose a new rule to rescind the MUPs and, in the interim, would delay their implementation for one year, until November 2020. 

In July 2020, the CFPB issued a new final rule revoking the MUPs but left the payment provision intact. The payment provision’s rules apply to lenders that offer short-term loans, loans with balloon payments, and any loan with an interest rate greater than 36 percent and give the lender account access. 

In recent weeks, as the compliance date has approached, actions have surfaced that suggest the payment provision will be challenged. The Community Financial Services Association – the trade group that filed the initial lawsuit against the rule – filed a new request to the Supreme Court to drop the payments provision. Separately, a letter from the American Fintech Council asked the new Acting Director to clarify that the payment provisions would not apply to Buy Now Pay Later lenders. 

The high-cost non-bank lending sector has changed in the last few years. Today, a much higher share of these loans originate from installment lenders. Although they are not traditional payday loans, their structures mirror some of the most abusive components of payday loans. Many make loans at rates far in excess of high-cost subprime credit cards, for example, and some of the larger companies in the space make loans with rates above 100 percent. Some non-bank installment lenders pack loans with add-on fees, use unusual accounting techniques to delay the crediting of principal repayments, and have high rates of loan renewals. 

In recent weeks, Congress has taken up legislation to reverse some of the consumer-friendly junk fee rules to rein in junk fees that were finalized by the Biden Administration CFPB. Medical debt on credit reports, overdraft lending by very large financial institutions, and the payment app larger participant rules have all been subject to CRA resolutions. While none have been finalized, the threats are serious.

Suspending the payment provisions is different, as it was preserved under the leadership of a Director appointed by President Donald Trump. The rule has bipartisan support. Changing the rule now would be disruptive. The industry has had years to prepare. Canceling the rule will help no one except the share of installment lenders who want to use the threat of overdraft fees as a coercive scare tactic and would expose millions of struggling households to more expensive and wealth-draining overdraft and non-sufficient funds penalty fees. 

Source: https://consumerfed.org/preserve-the-payday-lending-rule/

 

April is Fair Housing Month in the State of Maryland: Free Trainings Available!

 

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Thursday, March 27, 2025

Fair Housing Webinars Informational Flyer with QR Codes

FAIR HOUSING MONTH 2025
Webinar Series

Wednesday, April 2
12:00pm to 1:30pm
"Redlining in Real Estate"​
Register Online

This event will address the unique challenges that persist due to the lasting effects of redlining practices on historically marginalized communities.

Wednesday, April 9
12:00pm to 1:30pm
"Addressing Appraisal Bias, The Roles of
Law Makers, Industry and Homeowners"
Register Online

This event will address the unique challenges faced by marginalized communities in the appraisal process.

Wednesday, April 16
12:00pm to 1:30pm
"Enforcement"
Register Online

This event will address the unique challenges faced when individuals experience housing discrimination.

Wednesday, April 23
12:00pm to 1:30pm
"Source of Income"
Register Online

This event will address the unique challenges faced by individuals and families whose income sources are often overlooked or undervalued in housing and lending practices.

 


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UPCOMING EVENTS

Friday, April 4 at 1pm
Civil Rights Coalition of Maryland - Virtual Open House #1
Registration Required: https://bit.ly/3E2lDwy

Thursday, April 17 at 1pm
Civil Rights Coalition of Maryland - Virtual Open House #2
Registration Required: https://bit.ly/3E2lDwy

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Civil Rights Coalition of Maryland Virtual Open House is on April 4th and 17th

 

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Friday, March 28, 2025

Civil Rights Coalition of MD Open House Flyer

REGISTER TODAY & JOIN MCCR'S VIRTUAL OPEN HOUSE

Friday, April 4 at 1pm or
Thursday, April 17 at 1pm


In today's challenging times, it is important now more than ever that we come together in order to protect and promote our civil and human rights won in hard fought victories over many decades. For the benefit of all Marylanders, the Maryland Commission on Civil Rights will be relaunching Civil Rights Coalition of Maryland.

Are you interested in learning more about the Civil Rights Coalition of Maryland and becoming a member? Please register and join MCCR at one of our virtual informational open houses!

Please note - membership on the Civil Rights Coalition of Maryland will be reserved for organizations, agencies, nonprofits, and other stakeholder groups that want to work collaboratively to advance civil rights for all Marylanders. Private individuals will not be given membership on the Coalition.

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Monday, March 24, 2025

Abell Foundation Report Discovers Systematic Racial Bias in Home Appraisals in the Baltimore Metropolitan Area

 

A just-released report, authored by the Reinvestment Fund and funded by a grant from  the Abell Foundation, examined newly available public data from the Federal Housing Finance Agency’s (FHFA) Uniform Appraisal Dataset (UAD) to analyze potential racial bias in home appraisals in the Baltimore metropolitan area during 2013-2022. The report found that neighborhoods with larger non-white populations tend to have a higher percentage of homes with appraised values that are lower than the contract sale price than what is observed in predominantly white neighborhoods. Conversely, predominantly white, non-Hispanic neighborhoods tend to experience a higher percentage of homes with appraised values that exceed the contract price.

While these racial differences in appraisal accuracy have lessened somewhat in recent years, negative patterns are continuing. Analysis of the public appraisal data suggests the presence of systematic appraisal bias that undervalues homes in predominantly Black communities in Baltimore City and the surrounding counties. Key observations from the neighborhood level analysis are:

• Neighborhoods with a predominant percentage of residents who are not-white, not-Hispanic tend to have higher rates of under-appraising than neighborhoods that are predominantly white, not-Hispanic.

• Neighborhoods with a predominant percentage of residents who are not-white, not-Hispanic tend to have lower rates of over-appraising than areas that are predominantly white, not-Hispanic.

• Between 2018 and 2022, these patterns show signs of improvement, but they remain observable in the data.

It is important to consider that the available federal and local data are limited because a disproportionate share of appraisals regarding Black borrowers is excluded, meaning that any evidence it provides of racial bias in appraisals potentially understates the problem.

The report also provides a summary of policies Maryland could institute to reduce the impact of appraisal bias. Among the recommendations of the Maryland’s Task Force on Property Appraisal and Valuation Equity in late 2024 were: (1) Institute a reconsideration of value process in Maryland modeled after one used by the Department of Veterans Affairs which allows lenders or other interested parties to provide relevant information to an appraiser before a valuation is made and requires appraisers to contact the requester of the appraisal for additional information in cases where the appraised value appears likely to be lower than the agreed sales price; (2) Require timely reporting of sales of newly constructed residential properties to ensure that the comparable sales appraisers use to determine value reflect changes in communities; (3) Create a unit within the state government to provide a third-party review in cases where the reconsideration of value process is insufficient; and (4) Remove barriers to entry to the appraisal profession for minorities.

One recent example of this problem is that in March 2024, a Black couple - both professors at Johns Hopkins University - who claimed mortgage lender loanDepot denied a refinancing of their mortgage because it relied upon a racially biased, considerably low appraisal of their Baltimore home agreed to a legal settlement in which the lender vowed to change how it handles complaints of racially biased appraisals. The settlement filed in the U.S. District Court for Maryland also includes an undisclosed financial amount for the couple. It does not include any admission of liability or facts by loanDepot nor does it resolve complaints against the independent appraiser, who has denied liability and countersued for defamation.

Read the March 25, 2025 Abell Foundation report.

Read the March 26, 2024 Insurance Journal article.

Friday, March 21, 2025

Historic Redlining in Syracuse Continues to Impact Public Schools

 

The recent executive order limiting DEIA within the U.S. has sparked conversations regarding the importance of diversity within public schools. This article considers Syracuse, New York, as an example. While Syracuse has a population one-fourth of Baltimore, it has many parallels. 

The city of Syracuse is one of the nation’s most racially segregated, most redlined, economically polarized, and poorest cities. Its Syracuse City School District (SCSD) remains highly segregated as a result of neighborhood borders drawn a century ago. The borders’ effects still surface in the school’s demographics. SCSD continues to feel the effects of segregation despite the formal outlawing of redlining in 1968 through the Fair Housing Act. New federal orders limiting diversity, equity, inclusion and accessibility have local educators concerned for the future of these efforts.

SCSD (30 schools and 19,000 students) has seen low standardized test scores in recent years, according to U.S. News and World Report. From 2020-2022, 16% of students in SCSD elementary schools tested at or above a proficient level for English, while only 11% were found to be at that same level for math. Comparatively, the more suburban and predominantly white Fayetteville-Manlius Central School District (FMCSD) had 73% of students at or above the proficiency level for English, and 77% for math.

Christopher Cleveland, an assistant professor of education and education policy at Brown University, has said the current President’s policies are impacting the politicization of school segregation. While the president has not publicly spoken against integration efforts specifically, he said the cuts to federal funding likely will not help the cause. “(Integration) has not necessarily been considered a DEI issue. “So I think the question is how broadly framed DEI’s criticism is supposed to be relative to practices that have been in existence for the past 60-ish years.”

Syracuse remains one of thein the nation. When redlined maps are lined up with current maps showing the racial demographics of SCSD schools, the images reflect each other. The city still demonstrates a racial divide in schools, Searing said. The Century Foundation has reported that about 93% of Syracuse school segregation is a result of past segregation between districts. Neighborhoods that received a “D” rating from the Federal Housing Administration typically contain lower-performing schools and a majority Black student body. This contrasts neighborhoods that received an “A” rating, whose schools typically enrolled wealthier, white students and saw higher academic performance.

“Segregation has been illegal since 1964, but segregation still exists because the processes that created these realities have been in action for much longer,” Robert Searing, curator of history at the Onondaga Historical Association commented. Segregation within school districts can also be traced to districts’ current catchment borders that outline school districts, frequently shaped to protect white neighborhoods and separate them from communities with more Black and Brown residents. 

Christine Ashby, director of the Center on Disability and Inclusion at Syracuse University said “In the redlined neighborhoods, students with disabilities, particularly students of color, were less likely to be included, less likely to be in general education, and more likely to have particular disability labels than kids in other neighborhoods.”

To be certain, in addition to redlining, white flight - more affluent and white people moving to suburban areas for improved education options - also has played and plays a large role in the segregation of SCSD.

“Restrictive racial covenants were outlawed by the Supreme Court in 1948, but they continued to be enforced, because, as with any law, the law is only as good as the enforcement mechanism,” Searing said. “Is redlining technically illegal? Sure it is, but the practices still continue.”

Read the March 21, 2025 Syracuse University The Daily Orange article.

Wednesday, March 19, 2025

Anne Arundel County Hate/Bias Reporting Forum is March 29th

 

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Wednesday, March 19, 2025

AACO Hate Bias Forum Flyer - Linked to Registration Page

Make a difference in our community!

Register for the Anne Arundel County Hate Bias Forum, a vital collaboration between the Maryland Commission on Civil RightsMaryland Attorney General's Office, the Anne Arundel County Office of Equity & Human Rights (Shepard-Byrd Hate Crimes Prevention Program), and community members. We'll be working together to improve hate bias reporting and education. Share your insights during open discussions and panels.

CLICK HERE TO REGISTER TODAY

Anne Arundel Community College
Room Cade 219
101 College Parkway, Arnold, MD 21012
Saturday, March 29, 2025
9:00am until 4:30pm
Breakfast & Lunch Provided

Questions? Please email mccr.outreach@maryland.gov for assistance.

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