Credit Card Companies Switching Due Dates To Hike Rates

Chase and Citibank are routinely changing the due dates on their statements from month to month, often making customers with automatic payments late, thereby saddling them with late fees and higher interest rates per complaints pouring in to consumer watchdog groups.

Consumer advocates say the tactics used by the banks are greedy and not a coincidence.

In the case of one Citibank card user the due date was moved to cause him be late and give Citibank the ability to charge a late fee. The late fee allowed Citibank to raise the interest rate from 3.99% (for the life of the balance) to 24.44%. It sent the monthly bill for Citibank from $211 to $495.

Citibank has not responded to media inquiries regarding their floating due date strategies.

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.

$5 Million Verdict Against Debt Collector Portnoff Law Associates

Pennsylvania property owners who received collection demands from the law firm of Portnoff Law Associates were charged unauthorized fees, interest, and penalties. They filed a class action suit and were represented by the law firm of Donovan Searles, LLC.

The Court found Portnoff Law Associates had charged and collected fees, interest, penalties and attorney fees that the Pennsylvania courts had forbidden. The Court wrote: "The defendants refused to obey the law, and failed to even notify their clients that significant decisions forbidding their collection practices had been handed down. A penalty for continuing to charge add-on attorney fees in disregard of clear appellate court decisions and retaining those add-on attorney fees previously mistakenly charged must be imposed."

The Court entered a verdict against Portnoff Law Associates awarding the Class $2,654,972 for unlawfully received attorney's fees, $510,855 for unlawfully collected administrative fees, and $18,493 for interest on the unlawfully collected administrative fees. Under Pennsylvania's law known as "Act 6", the Court doubled the award relating to the administrative fees for a total of $1,058,697 and assessed a $500,000 statutory penalty. The Court also awarded $1,000,000 in punitive damages due to Portnoff Law Associates' intentional disregard of the rule of law as stated by the Appellate Courts of Pennsylvania.

This is the third class action successfully tried to verdict by Donovan Searles lawyers in the last three years.

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.