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ProPublica: Newly defanged, top consumer protection agency drops investigation of high-cost lender

ProPublica, January 23, 2018: Newly defanged, top consumer protection agency drops investigation of high-cost lender

In 2013, ProPublica published an investigation of the subprime lender World Finance. World was charging annual interest rates that could exceed 200 percent, often trapping customers in cycles of debt by enticing them to renew the loans over and over. In states where laws barred such high rates, the installment lender loaded many loans with nearly useless insurance products that bloated the cost.

Recently the CFPB sent a letter notifying World Finance that it was dropping its investigation into the installment lender. The company disclosed the letter in a press release yesterday. Although the CFPB had not actually sued the company, it did notify World in 2015 that an enforcement action was likely, according to a company disclosure.

“CFPB should protect consumers, not giant companies that use sky high interest rates to trap hundreds of thousands working Americans in debt,” she wrote. “Dropping this case is more evidence that Mick Mulvaney is just using his time at CFPB to pay back the donors who funded his political career,” said Sen. Elizabeth Warren, D-Mass.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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