The term “predatory lending” seems to have appeared out of thin air in recent years. In reality, the prevalence of the term—and the accompanying public panic—owes much to a sophisticated public relations campaign carried out by the increasingly high-profile Center for Responsible Lending (CRL).
As the most visible face of the half-billion dollar team of “Self-Help” non-profit organizations, CRL attacks competing loan products. Under the guise of advocating in the interests of its low-income customers, Self-Help makes loans at highly profitable rates and uncharitably takes those low-income customers to court over trivial monetary sums. Worse, CRL’s advocacy has worked to the disadvantage of low-income borrowers.
Many consumer advocates work with financial institutions to meet community needs. Yet the public record shows CRL and its financial web do more harm than good. This report examines CRL’s record and concludes that public officials, policymakers, and the media should be skeptical about the group’s complaints, while non-profit donors and government bodies need to re-examine the charitable loan rates they provide to CRL’s web of financial organizations.