CFPB’s Final Payday Rule is Released!

By Marisabel Torres, Senior Policy Analyst, Economic Policy Project, UnidosUS

We’re happy to be sharing some good news this week. UnidosUS is joining our advocacy partners in celebrating the Consumer Financial Protection Bureau (CFPB)’s release of their final payday rule!

Payday loans are loans in which the lender repays itself directly from the borrower’s bank account on the borrower’s payday. These loans are typically due in one lump sum. With a car title loan, the lender requires the power to immediately seize and sell the car as collateral, and uses this power to coerce payment.

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Saving Money While Building Credit with eMoneyPool

By Sabrina Terry, Senior Strategist, Economic Policy Project, UnidosUS

Photo: Got Credit.com

Building credit is an essential part of economic security for any American, but especially low-income Latinos and immigrant families. Latinos, like other communities of color, have historically been shut out of credit-building opportunities and continue to face several obstacles.

Latinos’ financial background make it difficult for them to acquire credit through traditional financial institutions. Per the Consumer Financial Protection Bureau (CFPB), Hispanics are more likely to be “credit invisible” than their White counterparts, and have some of the highest rates of un-scored credit records. These challenges are exacerbated for Latino immigrants who must also overcome language, proof of income, and legal status barriers when navigating the U.S financial system. Despite their economic hardship, Latinos are avid savers and prefer to take a savings-based approach to financial challenges. Yet, savings alone will not help them bridge the gap between their earnings and their expenses or to take advantage of economic opportunities—they also need access to credit.

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CFPB’s New Consumer Protection: Restrict Forced Arbitration

By Renato Rocha, Policy Analyst, Economic Policy, UnidosUS

The same week we announced our new name—UnidosUS—the Consumer Financial Protection Bureau (CFPB) issued a final rule that prohibits financial contracts from having forced arbitration clauses with class action bans. In effect, the new rule restores the right of consumers to come together in court by prohibiting class action bans, giving consumers a way to unite and hold corporations accountable for systemic misconduct.

Forced arbitration is a rigged system. Often, forced arbitration requires consumers to take a dispute to a private arbitrator chosen by the company, rather than exercise their right to have their complaint heard before a court. Given the association between the company and the arbitrator, forced arbitration causes considerable unfairness to consumers.

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Giving Credit Where it’s Due: Latinos and Credit Scores

By Agatha So, Policy Analyst, Economic Policy Project, NCLR
Family in front of house

In the run up to the Great Recession, Latinos and other low-income homebuyers of color more often than not received higher-priced mortgage loans than White borrowers. Today, Latinos and low-income communities of color are still being short-changed in the mortgage market.

In 2015, few mortgages were made to Latino and Black borrowers, with 8% of all home purchase loans made to Latinos, and only 5% going to Black borrowers. Tight lending standards have made it difficult for millions of Americans to buy a home since the Great Recession, especially for Latinos and low-income families with credit scores below 700. While the minimum credit score needed to qualify for a home loan has increased by 40 points, the credit scores of Latinos who receive mortgages have increased by nearly 80 points since 2000.  Moreover, Latino borrowers are less likely than White borrowers to have a credit score and full credit history, making them appear riskier to lenders than they really are.

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Is Homeownership Just a Dream for Latino Millennials?

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

Family in front of home

While American families who bought a home before the Great Recession were likely most concerned with the interest rates of their home loan, today’s millennials might be more preoccupied with the interest rates and repayment plans on their student loans.

Nearly 70 percent of bachelor’s degree recipients leave school with debt. Student loan debt is one of the largest burdens carried by Americans today, second only to mortgage debt. As a result, it comes as no surprise that student loan debt may be holding back millennials, especially older millennials, from buying a home.

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