EZPAWN To Pay Texas $600,000 For Exposing Customers To Identity Theft

A year ago the Texas Attorney General's office took action against Texas-based EZCORP Inc., and its subsidiary, EZPAWN, for systematically exposing its customers to identity theft. According to documents filed by the Attorney General, the pawn shop and payday lender violated the law by repeatedly failing to protect customer records that contain sensitive personal information.

Investigators discovered EZPAWN stores exposed customers’ personal identifying information by discarding business records in easily accessible trash cans behind the stores. According to investigators, the records included promissory notes and bank statements that contained names, addresses, Social Security and driver’s license numbers, and checking account information.

The defendants were accused of violating the Texas Deceptive Trade Practices Act (DTPA) and the 2005 Identity Theft Enforcement and Protection Act, which requires the safeguarding and proper destruction of clients’ sensitive personal information. Under the law, the Office of the Attorney General has the authority to seek penalties of up to $25,000 per violation of the DTPA and $50,000 per violation of the Identity Theft Enforcement and Protection Act.

The agreed final judgment requires that EZPAWN overhaul their information security program and pay $600,000 to the State of Texas, which will help fund future identity theft investigations.

EZCORP Is Loansharking Per Florida

EZCORP is one of the biggest pawnshop chains in the US. The pawnshop inventory it sells is mostly jewelry, tools, electronics, sports equipment, and musical instruments forfeited by customers who used them as collateral and then couldn't repay the sky high-interest loans in time. EZCORP also peddles payday loans through about 75 of its pawnshops, as well as more than 430 EZMONEY payday loan stores in nearly a dozen states.

Minus Florida.

In March an administrative law judge ruled the several hundred percent annual interest rate charged by EZCORP violated Florida's anti-loan sharking statutes. Last week, Florida's Office of Financial Regulation served EZCORP with a cease and desist order requiring EZCORP to comply with Florida law or close their shops.

EZCORP announced today they would close their Florida locations pending an appeal of the order to comply with loan sharking laws.

Jefferson Capital Systems Collection Agency And CompuCredit Hammered By Feds

After CompuCredit failed to present an acceptable settlement offer to the U.S. government, U.S. regulators moved forward and accused CompuCredit Corp and two banks of deceiving hundreds of thousands of credit card customers by withholding important details and blindsiding them with fees. The FTC lawsuit also names collection agency Jefferson Capital Systems, a subsidiary of CompuCredit, as a defendant for violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA).

The regulators filed a series of civil and administrative-proceeding charges against the companies seeking more than $200 million in restitution and civil penalties.

After a joint investigation by one agency that regulates banks and another that enforces consumer fraud and deception rules, the regulators said the companies engaged in "unfair and deceptive practices" by failing to properly disclose upfront fees and credit limits to consumers with poor credit.

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National Arbitration Forum Exposed By BusinessWeek

What if a judge solicited cases from big corporations by offering them a business-friendly venue in which to pursue consumers who are behind on their bills? What if the judge tried to make this pitch more appealing by teaming up with the corporations' outside lawyers? And what if the same corporations helped pay the judge's salary?

It would, of course, amount to a conflict of interest and cast doubt on the fairness of proceedings before the judge.

Yet that's essentially how one of the country's largest private arbitration firms operates. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money. Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes over bills rather than have the cases go to court. What consumers also don't know is that NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail.

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Military Families Losing Foreclosure Battle

Military families are losing their homes to foreclosure actions four times faster than the national average. Foreclosures in areas within 10 miles of military facilities rose by an average of 217% from January through April, compared to an overall 59% rate, according to RealtyTrac.

The biggest surge was in Columbia, S.C., home to the Fort Jackson training base. The second-biggest increase was in Woodbridge, Va., next to Marine Corps Base Quantico. More...

Dell Slapped Down For Fraud And Abusive Debt Collections

Dude, you're getting a fine and a restitution order.

New York Attorney General Andrew Cuomo has won a lawsuit against Dell and their credit division, Dell Financial Services (DFS) for fraud, false advertising, deceptive business practices, and abusive debt collection practices.

State Supreme Court Justice Joseph C. Teresi, who made the ruling, said: "Dell has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."

"Dell lured consumers to purchase its products with advertisements that offered attractive "no interest" and/or "no payment" financing promotions. In practice, however, the vast majority of consumers, even those with very good credit scores, were denied these deals. In a classic "bait and switch" scheme, DFS instead offered consumers financing at high interest rates, which often exceeded 20%. Dell and DFS frequently failed to clearly inform these consumers that they had not qualified for the promotional terms, leaving many to unwittingly finance their purchase at high interest rates."

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Maxed Out On Showtime Tonight

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders is a book and documentary that show abusive practices in the credit card industry. The book and movie use interviews with creditors and debtors. The film is on tonight at 7pm on Showtime and will also be on Monday May 26 at 10 am, and Thursday May 29 at 11pm. The film is also available through Netflix, Amazon.com and the usual locations.

The purpose for the book and the movie is to raise awareness of how credit and lending issues affect society. The film and book illustrate how banks and other creditors deliberately market to people who are more likely to have problems paying and that the creditors benefit from connections to government, the debt collection industry, and from lawmaker apathy.

The trailer is below.

Check Into Cash Payday Lender Evacuates Ohio As New Laws Chase Them Out Of Another State

Less than two months after Check Into Cash was legislated out of Oregon, the payday loan company announced it will close 93 Ohio locations.

Ohio legislators passed a bill capping interest rates on their payday loans. The Oregon rate was set at a 36 percent cap on payday loans.

The Tennessee based company blames leaving Ohio on Ohio State Legislators for passing House Bill 545, which will limit the interest on payday loans to 28 percent, from the current 391 percent.

The bill now awaits Gov. Ted Strickland’s signature, and a spokesman says that should happen next week. The law would take effect 90 days later.

Lawmakers say if the industry can’t deal with the limits, too bad. Ohio House Speaker Jon Husted says payday loans have contributed to debt problems that have sent shockwaves through the economy.

Cash America International Rises As Its Customers Drown In Debt

When its first quarter numbers came out last month, pawn loan provider and payday loan operator Cash America International Inc. (NYSE: CSH) said revenue from pawn loan and cash advance fees boosted first-quarter earnings higher than previously expected. The Fort Worth-based company said earnings rose 34 percent to $25.8 million, or 86 cents per share, from $19.2 million, or 63 cents per share, in the year ago period.

What many may not know, however, is how much money they and others are making at the expense of working families with Internet loans that are outside the regulatory reach of most state consumer protection agencies.

"It's insane. It is growing like wildfire," said Henry Coffey, a Baltimore-based stock analyst who tracks the payday loan industry including Cash America's online loans. One factor in the growth of online loans, which charge as much as 2,000 percent interest, is that they effectively hook borrowers into cycles of debt, often forcing people to take second and third loans to cover ballooning debts."If you are paying over 1,800 percent interest, you will never get out of that debt," said Elizabeth Schomburg, an official with Family Credit Managing Services, a Rockford-based credit counseling agency.

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Instant Cash Title Loans Busted By VA Attorney General

Title lending is the less well known and even more insidious cousin to payday lending. A borrower in desperate shape puts up the title to their car as collateral for a few hundred dollars at interest rates 20 or more times higher than traditional finance companies.

An $815 loan would typically require repayment of $2,625 over 12 months — or lose the car. Not surprisingly, many borrowers lose their cars to repossession.

Virginia Attorney General Bob McDonnell, has had enough of it. He says Instant Cash Title Loans, a title lender in his state, charged illegal interest rates for more than two years and is seeking relief for its customers in court.

The suit was filed in Richmond Circuit Court and asks all loans made by the company during the relevant period to be considered "null and void." He also seeks an amount equal to the aggregate of all principal and interest collected on the loans for the allegedly affected consumers.

ACORN Applauds Fed Proposal For Crackdown On Abusive Credit Card Companies

The Association of Community Organizations for Reform Now (ACORN) is the nation's largest community organization of low- and moderate-income families. ACORN President Maude Hurd released the following statement today on the announcement of proposed new regulations on credit cards from the Office of Thrift Supervision, National Credit Union Administration, and Federal Reserve:

ACORN members are encouraged by this step forward, especially as it represents a break from the traditional hands-off approach of federal regulators under the Bush Administration. Finally, there seems to be some recognition that mere disclosure and words of encouragement are not enough to protect consumers. Although today’s proposed regulations are far from perfect, they represent a stark break from the failed policies of the past, and that alone is worth celebrating. In the current foreclosure crisis, many banks have decided to squeeze their credit cardholders to get some black ink on the books, and abusive credit card practices and arbitrary rate hikes are spiraling out of control.

ACORN members are particularly excited by the provision that would not allow credit card companies to apply payments to the balance with the lowest interest rate first, although we would like the provision to go further and require payments be applied to balances with the highest interest rate. This stronger option and many other provisions can be found in a proposal from Senator Chris Dodd for a Credit Cardholders’ Bill of Rights, which ACORN endorses and hopes to see adopted. ACORN also supports proposed protections to declare unfair and deceptive the charging of interest on debt that has been repaid and assessing unreasonable late fees.

We hope that this new proposed regulation signals a sea-change in the federal government and Federal Reserve’s approach to handling the financial industry. For years, ACORN has pressed the federal government to issue regulations protecting homeowners from predatory lending and our calls have gone unheeded. Perhaps one silver lining from the eminently preventable subprime crisis that we face today is that regulators have realized that laissez-faire approaches to these issues set up the markets for failure. Now regulators must go further, and Congress must also act to reign in abusive credit card practices.

Congress Closer To Stopping Credit Card Industry's Abusive Practices

The credit card industry took the center stage on Capitol Hill this week, during hearings on the "Credit Cardholders' Bill of Rights," legislation sponsored by Rep. Carolyn Maloney (D-NY).

Credit card abuses are widespread, entrenched and unlikely to end without a ban. Unfair practices that are causing so much pain and financial damage to hard-working families must be stopped such as credit card companies piling on excessive fees; charging interest on debt that is paid on time; charging so-called "trailing interest" that is added between the time a bill is sent out and the date the bill is paid; increasing interest rates on cardholders who pay their credit card bills on time (employing so-called "universal default"); and applying higher rates retroactively to pre-existing credit card debt.

"The playing field between card companies and cardholders has become very one-sided in recent years. Yet, more and more Americans are turning to their credit cards to help pay bills, buy groceries, and make ends meet in this troubled economy," said Maloney, who serves as chairwoman of the Subcommitee on Financial Institutions and Consumer Credit.

"Instead of looking the other way while Americans fall deeper into debt, Congress can and should take swift action to reform major credit card industry abuses and improve consumer protections for cardholders," she said.

State Supreme Court Upholds Payday Lender Loan Shark's $1.4 million Fine

The Arkansas Supreme Court on Thursday upheld a $1.4 million fine levied against the owner of 14 payday lending businesses in Arkansas. The defendant, Dennis Bailey, had appealed the fine on technical grounds.

The decision also affirms the illegal triple-digit interest payday loans made by Fast Cash and Cash Advance have no legal standing and cannot be enforced.

The court's ruling follows state Attorney General Dustin McDaniel's crackdown on payday lenders issuing high-interest loans barred by the state's constitution.

McDaniel last month sent a cease-and-desist letter to 156 payday lenders in Arkansas notifying them that the state constitution caps interest that may be charged at five percent per annum above the Federal Reserve Discount Rate at the time of the contract, or 17 percent currently.

"In addition, I hereby demand that you void any and all current and past-due obligations of your borrowers, and refrain from any collection activities related to these payday loans," he added.

Lenders Canceling Home Equity Lines Of Credit (HELOC) Without Notice

Just because you paid a large fee to have your home equity available to you as a line of credit doesn't mean its still there, even if you've never missed a payment.

Hundreds of thousands of homeowners are having their lines of credit reduced or canceled. Countrywide Financial, for example, says it will suspend credit lines for 122,000 customers regardless of whether their homes have lost value or they have missed payments. Washington Mutual, IndyMac Bank, Chase and Capital One are sending bad news notifications to hundreds of thousands of families as well even in areas where home prices are rising.

The letters don't contain any offers of refunds. If a closing fee of $1000 was paid for a $25,000 second mortgage line of credit and the line is cut in half for no reason, isn't a $500 refund in order?

Some borrows are finding out their account has been frozen when they are notified they have bounced a check. There is an appeals process for some account holders, but if you are in Iraq and your new wife is counting on that line of credit to keep the home in order until your return, how do you appeal in an effective and timely way?

Whoever is to blame for the credit crisis, families who have done nothing but pay property taxes, invest in their communities and pay their bills on time should not be the first to bear the burdon of fixing it.

Senate Passes Bill To Protect Home Owners After Removing Protections

The Senate on Thursday passed (84-12) HR 3221 giving tax breaks to builders and lenders while providing no help to struggling homeowners.

The so called housing crisis bill had already been stripped of actions that would help homeowners facing foreclosure. The provision that would have permitted bankruptcy judges to modify interest rates and reduce mortgage balances to the current value of a home was removed a week ago. Nothing in the bill facilitated refinancing or modification of mortgages to stem the continuing tidal wave of foreclosures. The only so called help for homeowners was money for "counselors".

Home builders and financial companies however, got billions. Money for buyers of foreclosed property and money for local governments to buy foreclosed homes is in the bill. Those actions would artificially inflate the value of the homes already foreclosed on by financial companies and remove the chief motivation for financial companies to work out loan modifications with homeowners.

While the problem of a large inventory of foreclosed homes is real, subsidizing their purchase reduces the pain felt by companies that choose to evict families and shifts the balance in favor of foreclosure.

Homeowners Facing Foreclosure Need A Lawyer

With foreclosures hitting 20,000 per month and rising, millions of Americans had an interest in bankruptcy reform that would have empowered federal judges to modify home mortgage payments. Despite that hope for relief being extinguished when the U.S. Senate folded like cheap lawn chairs to the demands of the banking lobby, there is still a reason to see a lawyer before giving up a home.

After the vote, ABC World News ran a story about legal aid attorney Jessica Attie, who has been fighting to help families keep their homes in New York. Unlike most of the corporate media stories about the foreclosure crises, this one focused on consumer rights and legal remedies available when fraud, deceptive practices or Truth in Lending Act (TILA) violations are exposed. Of course, none of those violations will be exposed by the lobbyists that shut down bankruptcy reform. The point of ABC's valuable report was to have a lawyer review the mortgage before giving up.

ABC News has set up a web page to keep track of Attie's progress and allow her to post comments regarding new developments.

Campaign Manager Is Subprime Lender Board Member

Hillary Clinton has been spending more time on the campaign trail calling out predatory lenders who have left millions of Americans in the foreclosure process. Yet, her campaign manager, Margaret “Maggie” Williams, sits on the board of Delta Finance, one of the largest subprime mortgage lenders.

Williams has earned about $200,000 on the Delta board. Delta made most of its money buying and selling loans at a profit either through securitization or straight sale. Financial statements and federal filings indicate that Delta made huge profits between 2004 and 2007 mostly by refinancing loans to homeowners with moderate and middle incomes in urban neighborhoods.

When the average 30 year mortgage was 6.25 percent, public records show Delta brokered thousands of fixed-rate refinancing loans with rates of anywhere from 11.3 to 13.6 percent.

Reports provided by the Federal Financial Institutions Examination Council (FFIEC), an inter-agency body that proscribes standards for U.S. financial institutions, found that in 2006 the vast majority of Delta’s refinancing loans had rates of around 13.3 percent. The average rate on Delta home mortgages was 14.9 percent.

The Foreclosure Prevention Project has described Delta Funding as having epitomized predatory lending.

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Fee Harvesting Credit Cards Trap Many In Debt

Fee harvesting credit cards are marketed so that consumers will not be able to tell the difference between the high interest rate and high fee cards and regular credit cards.

Fee-harvesting cards represent the the subprime credit card market, credit cards offered to people with low FICO scores or students just starting out with no credit. Sometimes borrowers think they are getting a financial life preserver, but it's really an anchor in disguise.

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Economic Decline Good For High Interest Lenders

As hundreds of thousands of American homeowners fall behind on their mortgage payments, more people are turning to short-term loans with extreme interest rates, just to get by.

While hard figures are hard to come by, evidence from nonprofit credit and mortgage counselors suggests that the number of people using these so-called "payday loans" is growing as the U.S. housing crisis deepens.

"We're hearing from around the country that many folks are buried deep in payday loan debts as well as struggling with their mortgage payments," said Uriah King, a policy associate at the Center for Responsible Lending.

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Lenders Victimized Consumers With Predatory Loans

California Attorney General Edmund G. Brown Jr. has closed Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions, accusing them of running a complex predatory lending scheme using bait and switch tactics to victimize thousands of consumers in California, many of whom have lost their homes.

San Bernardino District Attorney Michael A. Ramos also announced that several individuals affiliated with Lifetime Financial were arrested on charges including conspiracy, grand theft, forgery and elder abuse.

Attorney General Brown announced plans to bring additional legal actions, both civil and criminal, in the comming weeks against other lenders victimizing homeowners across California.

Credit Is Too Expensive From Payday Lenders Says Arkansas

The Arkansas state attorney general in is shutting down predatory payday lending offices, saying the fees charged are a danger to the state and against the law.

"It is the position of this office that you must cease and desist your payday lending practices," Attorney General Dustin McDaniel said in the letters.

"These businesses have made a lot of money on the backs of Arkansas consumers, mostly the working poor," McDaniel said in a statement. "Charging consumers interest in the range of 300 to 500 percent is unlawful and unconscionable and it is time that it stops."

McDaniel acted after the Arkansas state Supreme Court ruled the high interest rates charged by payday lenders violate the state constitution and the Arkansas Deceptive Trade Practices Act.

Credit Card Companies And Rep. Judy Biggert (IL) Silence Their Victims

There is a law being proposed that would grant consumers some relief from abuse at the hands of credit card companies. Several victims of credit card abuse were supposed to testify before the Sub-Committee on Financial Institutions and Consumer Credit on Capitol Hill this week about the predatory practices of America's most prestigious lenders.

But they never got the chance.

That's because the committee's Republicans, led by Rep. Judy Biggert (IL) and the banks whose practices were about to be discussed on Capital Hill demanded that those testifying about their experiences sign a waiver that allowed their personal financial information be revealed to the public. The chairwoman, Rep. Carolyn Maloney, D-N.Y., didn't have the votes to stop the intimidation so the witnesses were silenced. But representatives of Bank of America, JPMorgan Chase, and Capital One were allowed to testify without signing away their privacy rights.

Anyone is free to contact Congresswoman Judy Biggert and ask her when the Republicans on her committee will go back to allowing debate in congress without intimidation by her partners in crime and the predatory lenders who pay their way.

Bad Credit & No Credit No Problem For 500% Interest Loans

There was an organized rally on the streets of Denver today. It was not a rally for equal justice or social justice or economic justice as one might expect of such things. It was a rally to keep 500 percent payday loans legal. The demonstration was organized by payday loan companies threatened by a law that might make them scale back to a mere 45% annual interest rate. Payday loan employees made up the 200 or so demonstrators.

House Bill 1310 seeks to curb payday lending institutions in Colorado which can now charge up to 521 percent interest on a $300 loan. The average APR for a payday loan in Colorado is 350 percent. The bill narrowly passed the State House and will face a preliminary and important vote in the full Senate Wednesday.

The bill is based on a law the Pentagon successfully lobbied Congress for two years ago. Federal law set a 36-percent cap on payday loans to U.S. military service members because an estimated one out five were in deep debt because of such loans.

Predatory Mortgage Companies Fast Tracked To Federal Court

The facts about predatory loan practices in minority communities are not new. In 2006 the Center for Responsible Lending released a study that found when income and credit risk were equal, African-Americans were more than 30 percent more likely to receive higher-rate, more expensive subprime loans than Caucasians. A 2007 report by the Federal Home Loan Mortgage Corporation ( Freddie Mac) showed that minority borrowers pay higher annual percentage rates on mortgage loans than non-minorities with equal income and credit risk.

Based on those facts and more, the NAACP filed suit in 2007 in U.S. District Court in California's Central District, alleging CitiMortgage, Suntrust Mortgage, GMAC Rescap, JP Morgan, National City, First Horizon, Ameriquest Mortgage Company, Fremont Investment & Loan, Option One Mortgage Corporation, WMC Mortgage Corporation, Long Beach Mortgage Company, BNC Mortgage, Accredited Home Lenders, Bear Sterns Residential Mortgage Corporation, Encore Credit, First Franklin Financial Corporation, HSBC Finance Corporation and Washington Mutual, made high cost subprime home loans to African American buyers, even when the home buyers qualified for less expensive traditional loans.

Last week the NAACP filed papers that will fast track the federal class action lawsuit. "Quickly resolving this case is essential for victims who have ruined credit and who are losing their homes. This isn't just about justice for the victims. This case is about making sure that this kind of discrimination is stamped out for good," said NAACP General Counsel Angela Ciccolo.

"Home ownership is supposed to build wealth to invest in communities, pay for college and support peoples' retirements. Instead, these predatory lenders have sent their victims spiraling backward into debt and foreclosure," Ciccolo said. "Entire neighborhoods are dragged down when foreclosed homes sink property values, attract crime and reduce the tax base."

Eliot Spitzer's Fight Against Predatory Lenders Might Have Cost Him

Elliot Spitzer testified before congress last month about the Bush administration looking the other way and doing nothing to protect American homeowners from the predatory lenders that were destroying uncounted numbers of families. Spitzer went further to testify that federal law enforcement under this administration chose instead to align itself with the criminals that were victimizing consumers.

Today federal law enforcement got him back.

Private Student Loans Are The New Predatory Lending

College students are becoming increasingly reliant on high-priced and lightly regulated private loans to pay tuition and other expenses.

And those students are risking their futures.

“Paying the Price: The High Cost of Private Student Loans and the Dangers for Student Borrowers”, is a new report from the National Consumer Law Center

It finds that:

• Private student loans are more expensive than federal loans.

• Private loans do not have the same range of protections for borrowers that government loans have.

• The market is fueled by profits derived from repackaging and securitizing loans and selling them to investors.

• Private loans aren’t subject to the rate caps that fix the interest rate on most federally backed loans at 6.8%. The average initial rate for the loans in the survey was 11.5%, and the highest was nearly 19%.

• Unlike federal loans, makers of private loans generally do not offer flexible relief, including such options as income-based repayment, economic hardship deferments and cancellations for severely disabled borrowers.

• The private loans restrict the borrower's access to justice. Sixty-one percent of the loans studied included mandatory arbitration clauses. These are controversial hallmarks of predatory loans that limit a consumer’s ability to challenge problems with the loans or with the schools they attend.

In the current market, with complex products driven by securitization and products made for Wall Street rather than Main Street, borrowers can not rely on disclosures from private lenders to ensure they get the loan they want and can afford.

Predatory Subprime Mortgage Lenders Escape The Law

The most common phrase now associated with finance companies is: "We are happy to cooperate with the ongoing investigation."

However, as the Bush administration's Justice Department has turned a blind eye to wire fraud, mail fraud, RICO and extortion by corporate contributors, those corporate PR flacks are talking more and more about civil investigations, not criminal prosecutions. Civil investigations that will mean fines, not prison. And with the money that's been stolen by predatory lenders from millions of working Americans, the lenders have plenty of cash on hand to pay fines.

This week the Illinois attorney general subpoenaed records from Countrywide Financial investigating violations of lending and civil rights statutes by Countrywide's steering of minority borrowers into more expensive loans. The action by Attorney General Lisa Madigan followed a local magazine study that revealed Countrywide's difference in loan pricing between white and non-white Chicago borrowers.

Last week a United States Trustee filed a second lawsuit against Countrywide Financial for abusing the bankruptcy courts. In the complaint filed last Saturday with the Federal Bankruptcy Court in Miami, the United States Trustee for the Southwest region, Donald Walton, accused Countrywide of wrongly asserting claims related to the property of Miami residents who had reorganized their finances in bankruptcy and who were federally protected from liens or foreclosure actions. Their mortgages were current.

The Miami suit comes on the heels of a separate lawsuit in the bankruptcy court in Atlanta also accusing Countrywide of abusing the bankruptcy courts.

In the Miami case, Mr. Walton said that after a judge ruled Countrywide did not have a valid lien, it nonetheless pursued claims for nearly four years, including attempts to foreclose.

Even though the United States Trustee is a unit of the Justice Department, it is a civil division. Fines for ongoing criminal operations are not the answer. Order will be restored to lending and collections with a return to law enforcement, criminal prosecutions, and prison.

Payday Lenders Caught Not Disclosing Interest Rates

American Cash Market Inc., and Anderson Payday Loans, both based in California, and CashPro d/b/a MakePaydayToday.com, based in Nevada, stated their loan costs on their Web sites such as a $20 fee for a $100 loan. But they didn't disclose the entire costs. For example, they failed to disclose the annual percentage rate (APR) for a typical 14 day pay period from American Cash Market would be 460 percent. Loans from CashPro would have a 520 percent APR, and loans from Anderson Payday Loans would have an APR ranging from 521 percent to 782 percent.

Unfortunately for the Internet loan sharks, the Federal Trade Commission noticed.

Student Loans Pay For Millions In Sallie Mae Lobbying

The New York Attorney General has served subpoenas on Sallie Mae's corporate offices seeking information about a type of private loan the company offers, the company said in a regulatory filing.

This comes after it was revealed Sallie Mae spent four million dollars of payments from student loans not to decrease the cost of student loans but to lobby Washington DC insiders to get more favorable legal treatment.

According to Sallie Mae, students aren't paying enough for college and Sallie needs more. Of course 4 million is small change to Albert L. Lord, Sallie's CEO, who can pull in ten times that much in a single year.

Homeowners Seek To Cancel Predatory Mortgages With Class Actions

When standards loosened at many mortgage firms during the housing bubble it led to a rise of predatory practices. Now, record numbers of people are finding themselves with loans that are more than they were told they would be and are looking for a legal remedy to cancel the loans.

A federal appeals court is going to rule in a suit against Chevy Chase Bank if homeowners across the country can band together in class-action lawsuits against predatory mortgage companies and get their loans canceled.

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Predatory Lending Industry Front Group Disguises Itself As Consumer Rights Group

Astroturfing is slang for public relations campaigns that seek to create the impression of being spontaneous grassroots efforts, hence the reference to the artificial grass AstroTurf.

The goal of an Astroturfing campaign is to disguise the efforts as an independent public reaction to an opponent. Astroturfers attempt to orchestrate actions by both overt ("outreach," "awareness," etc.) and covert (disinformation) means.

An over-the-top bit of Astroturfing has shown up with a predatory lending industry front group calling itself the Consumers Rights League. The "Consumer Rights League" has actually been launched to oppose government reform of predatory lender loan sharking practices that have ensnared Americans in harmful payday loans, fostered hundreds of thousands of family foreclosures, tanked the stock market and helped put our country into a recession.

The predatory lenders have a lot to lose if governments ever catch on.

The primary target of this fake grassroots effort is the Center for Responsible Lending. Since they are the intended victims, the Center for Responsible Lending has provided facts about the misinformation and distortions predatory lenders are spreading here: "Debunking Industry Propaganda".

Payday Loan Victim Wins 200K

Emma Staton sued the payday lender Americash in 2001 and accused the company of violating state law by charging more than 17 percent interest. A judge ruled in her favor and awarded Staton $834,000 and $50,000 for attorneys' fees.

However, Americash successfully frustrated Emma's ability to collect the judgment.

Now, Arkansas' highest court has ruled Emma Staton can collect the two hundred thousand dollars in surety bonds from the payday lender it had posted in order to conduct business in Arkansas.

Barack Obama vs. Predatory Lenders

Barack held a Town Hall meeting in San Antonio, TX on February 19, 2008 prior to winning his 9th and 10th contests in a row. The crowd at his victory speech wanted to know his plan to take on predatory lenders.

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Payday Lender Whistleblowers Testify In Virginia

A former manager of a payday lending store urged Virginia legislators to pass aggressive industry reforms to stop what he called “financial terrorists” from preying on vulnerable Virginians.

The former manager revealed he was trained to push people into taking out the maximum $500 payday loan as a way to keep them coming back for more money. “I realized I was working for financial terrorists, bent on financially enslaving as many hardworking Americans as they possibly could, he said at a news conference. He appeared with John LaCombe, founder of CapAmerica, a group of former payday loan borrowers and whistleblowers.

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Failure To Prosecute Usury Laws Allows Predatory Lenders To Steal Cars

Potomac area lawyer Leonard J. Koenick shared the following story with the Washington Post, making the point that payday lenders aren't the only predators running loose.

"I'm a lawyer, and a client recently came to me with something called a "motor vehicle equity line of credit." For the "privilege" of borrowing $300, she had to first pay a $150 "membership fee" and was charged 300 percent interest. Her finance charge was $79.44 per month and, of course, that was only the interest. Her collateral was her car, and she had to give the lender a duplicate car key. She missed one payment; they took her car and sold it.

If that isn't criminal, it should be."

Predatory Lenders Have The Feds As Partners In Crime

Former crime busting NY Attorney General, and current NY Governor Elliot Spitzer, explains the collaboration between the feds and predatory lenders that worked to defeat state consumer protection statutes in today's Washington Post.

Happy Valentines Day, Mr. President.

Spitzer explains how the administration is conducting its war to prevent states from protecting their residents. The weapon of mass consumer financial destruction employed by Washington is called the Office of the Comptroller of the Currency.

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Failure To Prosecute Usury Laws Allows Payday Lenders To Steal Social Security Checks

The latest crime from the loan sharks, aka: the "payday" loan industry, is targeting recipients of Social Security and other government benefits, including disability and veteran's benefits to steal their entire incomes.

Although the law prevents the government from sending a recipient's benefits directly to lenders, and courts don't allow garnishments of Social Security, the loan sharks are arranging for borrowers to have their benefits checks deposited directly into bank accounts the loan sharks control. The banks immediately transfer the government funds to the lenders. The lender then subtracts debt repayments, plus fees and interest, before giving the recipients a dime. The loan sharks end up collecting annual interest of 400% or more, and gain total control over the Social Security recipients' finances, sometimes leaving them with nothing.

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Private Student Loans Setting Lifetime Debt Traps

Private student loan lenders are bombarding families of high school students with offers at much higher rates than federal student loans. Some private loans include variable rates that escalate like adjustable-rate mortgages, as wells as daily-compounding interest that begins while the students are still in school.

According to Student Loans for Higher Education a California Research Bureau (CRB) report, practices in the student loan industry are ensnaring some students and their families into an insurmountable lifetime of debt. And under federal law, students and their families cannot discharge student loan debt, even if individuals file for bankruptcy and even if the loans could only be described as predatory.

Class Action Suit Launched Against Predatory Mortgage Servicer Homecomings Financial LLC

Homecomings Financial LLC, a subsidiary of GMAC, is often in the news. And the news is rarely good. Recently Homecomings failed to pay an insurance policy for a customer even though that customer's homeowners insurance premium was escrowed and included in their mortgage payment. It wasn't an issue until the family's house was destroyed by an electrical fire and the family became homeless when they found out their insurance had been canceled for non payment.

Now Homecomings is in the news again because the law firms Mehri & Skalet and Sprenger + Lang have filed a multi-claim, nationwide class action lawsuit in the U.S. District Court for the District of Minnesota against them. The complaint alleges Homecomings, a loan servicer handling nearly 800,000 mortgages, has engaged in a nationwide scheme of illegal, unfair, unlawful and deceptive business practices that violate both federal and state laws in the servicing of home-secured loan transactions, including using deceptive fees to deliberately put borrowers into default in order to maximize profits.

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When Sallie Mae Debt Collectors Attack (the Wrong Guy)

Sallie Mae wants Christopher Null to repay his student loan immediately. The problem being he has never had a loan from Sallie Mae.

"A call comes in asking to talk to me about my student loan. I say I don't have a student loan. We go back and forth, establishing that I don't have the same Social Security Number or date of birth as the offending person, but apparently they live in San Francisco now, so of course it must be me. It always ends with them promising not to call me any more. Then they call back a few days later and we start all over."

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Failure To Prosecute Usury Laws Means Millions For Rent-A-Center

Deborah Williams walked in the door of the Rent-A-Center store under the Broadway el in Bushwick, Brooklyn. She was delivering $109 in cash, her February payment for a 27-inch television that she is buying over time.

If she does not miss any payments, she will own the television by the summer, for a total of about $900. Such televisions can be bought retail for well under $400, but that would require more money than Deborah Williams can put her hands on at one time.

If this were set up as a loan, the interest rate would be 71 percent and illegal under the usury laws. But this deal is called “rent to own.” In all other particulars, it is much like a subprime mortgage for pull-out sofas and television sets.

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Republicans Go Easy On Subprime Perpetrators

Bankrate.com, not a far left website, reviews the prescriptions of the presidential candidates on the home mortgage credit crisis.

In what some might see as a role reversal, the Republicans are soft on crime and only the Democrats have detailed fiscal plans and aggressive law enforcement strategies. Romney, Huckabee, and McCain want to freeze interest rates but are vague as to what, if anything, they would do to help distressed families struggling to keep their homes. Obama and Clinton have multi-point plans to crack down on unscrupulous mortgage brokers; mandate accurate loan disclosure; and help reduce foreclosures by making chapter 13 work for homeowners.

Student Loan Giant Sallie Mae Slapped By Stockholders In Fraud Suit