Tag Archives: Predatory Lending

Garnishing California’s Future: New Bill Seeks To Curb Wage Seizures

by Bill Raden, Capital & Main

Empty pockets

Unable to keep up payments, loans fall into default and too often result in crippling court-ordered garnishments that claim up to a quarter of earnings. … “People’s lives are being ruined by these very high, 25 percent garnishments – the national maximum – being taken out of their check before they get it home,” [one expert said]. … [SB 501 would] eliminate the current law’s penalty against garnished workers who might want to work more than 40 hours a week. As the law stands now, every additional dollar above $360 a week is taken by the creditor. Read More ›

Consumer Groups Urge CFPB To Provide Better Oversight, Rules Over Student Loan Servicing

by Ashlee Kieler, Consumerist

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A 2013 report from Consumers Union included anecdotal claims of servicer incompetence, like the borrower who was being charged more than twice the interest rate he was supposed to pay. More recently, the CFPB found that some student loan servicers took part in several illegal and shady practices. … Student loan servicing stands today where mortgage servicing stood over a decade ago: critically important and largely ignored. Read More ›

Abusive Lending Practices Can Lead To Negative Long-Term Consequences For Borrowers, Communities

by Ashlee Kieler, Consumerist

Creative Commons

If a borrower has one abusive loan, they may be more likely to struggle with their other debts. This can lead to stressed household finances, more subprime borrowing, and even default. Those stresses then have a way of trickling into other aspects of a consumer’s life, and even their community. Read More ›

More Auto Title Lenders Are Snagging Unwary Borrowers In Cycle Of Debt

by Jim Puzzanghera, Los Angeles Times

Pregnant woman worrying over bills

“I look at title lending as legalized car thievery,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento advocacy group. “What they want to do is get you into a loan where you just keep paying, paying, paying, and at the end of the day, they take your car.” … In California, the number of auto title loans jumped to 91,505 in 2013, the latest data available, from 64,585 in the previous year and 38,148 in the first year, 2011, that was tracked by the state Department of Business Oversight. Read More ›

AB 925 Dies: Secret Recording Of Business-Customer Cell Phone Calls Remains A Crime

Business spying on customer phone calls

Democrats on the Assembly Committee on Public Safety approved AB 925 on a 5-2 party line vote after strenuous opposition from CFC and other consumer, privacy, senior, student, labor and immigrant advocacy groups weakened the bill. Amendments were not yet in print but reportedly would require notification to customers that a call may be recorded 20 seconds into a cell phone conversation, so it remains a bad bill. Read More ›

Payday Loan Rules Proposed by Consumer Protection Agency

by Michael D. Shear and Jessica Silver-Greenberg, The New York Times

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Even supporters of the consumer bureau’s mission were critical on Thursday, saying that the proposed payday lending rules do not go far enough. A chorus of consumer groups said that loopholes in the proposal could still leave millions of Americans vulnerable to the expensive loans. … An analysis of 15 million payday loans by the consumer bureau … found that few people who have tapped short-term loans can repay them. Borrowers took out a median of 10 loans during a 12-month span, the bureau said. More than 80 percent of loans were rolled over or renewed within a two-week period. Read More ›

Credit Card Issuers Shouldn’t Bully Customers Into Arbitration Clauses

by David Lazarus, Los Angeles Times

Creative Commons

[The Consumer Financial Protection Bureau] study found that as many as 80 million U.S. credit card customers are subject to arbitration clauses. The study showed that arbitration is much better for businesses than for consumers. Only 20% of cases resolved in consumers’ favor from 2010 to 2011 resulted in relief being paid, according to the study, while 93% of cases resolved in favor of companies led to payments. More strikingly, the study found that when consumers prevailed in arbitration, they were awarded an average of 57 cents for every dollar claimed. But when companies prevailed, they received 98 cents on the dollar. Read More ›

Corinthian Students To Get $480 Million Relief From ‘Predatory’ Loans

by Chris Kirkham, Los Angeles Times

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As many as 170,000 students who took out private loans offered by Corinthian will see an immediate 40% reduction in their balances — about $1,880 on average — with additional reductions likely in the future. All students will see a 20% tuition reduction. And those enrolled in poor-performing programs can seek a full refund or transfer into another program. … Corinthian has been on a downward spiral since last summer, when the U.S. Department of Education restricted its access to federal student aid amid concerns that the company had falsified student job placement data. Read More ›

Is It Time For Regulators To Stab Zombie Debt Through The Brain?

by Chris Morran, Consumerist

Pregnant woman worrying over bills

What a lot of people don’t know — and what debt collectors rarely mention — is that most unpaid debt has an expiration date after which you can’t be sued for repayment. And even fewer consumers are aware that this dead debt can be sparked back to life by making a payment after it’s already passed on to the debt afterlife. A new report calls on federal regulators to make sure that debt doesn’t rise from the dead in zombie form. Read More ›

Why You Should Think Twice About ‘Buy Now, Pay Interest Later’ Deals

by Herb Weisbaum, Today

dave416 / Flickr

About half the retailers that offer some sort of financing program offer deferred interest plans, according to a recent survey by CardHub.com, a credit card comparison website. The report, Retailers with the Sneakiest Financing Offers, concludes that this is a “decidedly misleading and potentially harmful financing option.” Card Hub CEO and founder Odysseas Papadimitriou says these deferred interest offers are completely different from credit cards that offer zero percent interest on new purchases for a certain amount of time. Miss a payment on the credit card and you only pay interest on the unpaid balance – it’s not retroactive. Read More ›