Wednesday, March 31, 2010

Repo Madness - webinar, April 15

An estimated 1.9 million cars were repossessed in 2009. The vast majority of these were “self-help” repossessions done under state laws that allow automobile dealers and lenders to take cars without court action or the involvement of law enforcement. Many of these cars were vital to the economic success of the families from whom they were taken.

Perhaps not surprisingly, dozens of consumers, repossession agents and bystanders have been killed, injured or traumatized. Recent years have also seen rapid increases in the use of new technologies as part of repossessions, such as license plate scanners and electronic repossession devices. These new technologies raise issues such as privacy and safety concerns.

This webinar will examine the dangers of self-help repossession, and engage consumer advocates, privacy advocates and industry insiders in a discussion of the problems and potential solutions.

Speakers include:

- Leah Plunkett, The National Consumer Law Center Inc.
- Jay Stanley, Director of Public Education for the ACLU's Technology and Liberty Program
- Joseph S. Taylor, Vice President of Recovery Industry Services Company
- John W. Van Alst, The National Consumer Law Center Inc.

https://www1.gotomeeting.com/register/215227537

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Bill that would have sent homeowners to prison fails in committee

House Bill 1327 died in the Economic Matters Committee, and Marylanders should be breathing a sigh of relief. The bill said homeowners could go to prison for unknowingly hiring unlicensed home-improvement contractors.

Under current law, an unlicensed contractor has no legal recourse to enforce a contract; this is the only way to make sure there is an incentive for a contractor to be licensed. But HB 1327 would have reversed current law, and for the very first time would allow a home improvement contractor who is unlicensed to enforce a contract for home improvement services.

The bill would also make the consumer criminally liable for unknowingly entering into a contract with an unlicensed home improvement contractor. Consequently, a consumer who is taken advantage of would not only lose the relief they have been provided for the past 40 years but would also be subject to a $1,000 fine and imprisonment for 6 months.

Posing as a licensed home-improvement contractor is a common consumer scam. These con artists often do shoddy work and charge outrageous fees, preying on the most vulnerable consumers who are unaware of the requirement for licensing and of the potential reimbursement from the state home improvement fund. That's why Marceline White, MCRC's executive director, testified against the bill in the House Economic Matters Committee. Investigator John Creel of the Montgomery County Office of Consumer Protection also testified against this bill.

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Tuesday, March 30, 2010

Comptroller Franchot to do web-chat on tax questions

On April 1st, Comptroller Peter Franchot will host a live Web chat open to all Marylanders. The Comptroller will answer tax-related questions and offer advice on financial literacy issues. To participate, check this page at 1:00 pm on April 1st.

http://www.marylandtaxes.com/onlineservices/chat.asp

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Debt Settlement reform stalls in Senate

The Maryland General Assembly’s Senate Finance Committee today set aside legislation to regulate the debt settlement industry. Instead, a summer study will be commissioned to gather more data and input on the issue.

SB701 would have capped advance fees at $50 and limited the total fee to 15% of the amount the company saved the consumer.

“While of course we would have preferred passage of a strong bill, MCRC is glad that the Senate recognizes the need to protect consumers and to pass meaningful regulations,” said MCRC Executive Director Marceline White. “We look forward to participating in the study and to helping bring a good bill forward in the next session. We are also hopeful that the FTC will issue new rules this spring that will address some of these important issues.”

The Federal Trade Commission is considering new rules that would, among other things, ban advance fees in debt settlement. For more information about the proposed FTC rules, go here: http://www.ftc.gov/opa/2009/07/tsr.shtm.

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Monday, March 29, 2010

Tell your senator to support debt settlement regulation - today!

Monday, March 29: Debt settlement legislation faces a huge hurdle on Tuesday and state senators need to hear from you today.

Legislation that could protect vulnerable consumers in Maryland from unscrupulous debt settlement firms faces the make-or-break point on Tuesday when the Senate Finance Committee is scheduled to vote on Senate Bill 701.

Some in the industry are pushing hard against the ban on advance payments and say the only way they can stay profitable is to charge debt-strapped consumers huge fees before actually completing the tasks they were hired to perform.

Maryland Attorney General Doug Gansler and 40 other state Attorneys General said in a letter to the FTC that “prohibition on advance fees will prevent the substantial monetary losses suffered by consumers, level the playing field, discourage unscrupulous operators from flocking to the industry and facilitate efficient and timely enforcement.”

Also at issue is the amount of money companies can charge the consumer for their services. SB 701 would cap the fees at 15% of whatever the debt settlement firm saves the consumer based on their debt at the time of enrollment with the program. For example, if the company cuts the consumer’s debt from $30,000 to $20,000, the company would receive $1,500 (15% of $10,000). Some debt settlement firms say need to charge far more than that in order to make a profit. MCRC feels more than 15% is too high of a price for economically fragile consumers to pay.

To find out more about advance fees, fee limits and how other states are regulating the industry, read this MCRC debt settlement fact sheet.

Another question is whether attorneys will be exempt from the new regulations. Industry lobbyists are pressing for an amendment that says the new rules do not apply to those "providing legal services in an attorney-client relationship." Both the AG's office and MCRC view this amendment as highly problematic and do not support it.

This language would create a huge loophole for attorneys who operate debt settlement businesses under the guise of attorney client relationships, including those such as Frederick-based Richard Brennan who took millions from consumers before the state’s Consumer Protection Division was able to stop him (and the Bar revoked his license). The only recourse available for consumers who worked with an attorney-based debt settlement firm would be to have the attorney disbarred, which could take years and cost consumers millions of dollars.

Our position is that if an attorney is principally engaged in operating a debt settlement business, they should be regulated like a debt settlement business. Regulation by the Bar is after the fact and does not prevent harm to consumers in the first place.

Consumers and their advocates should let the Senate Finance Committee know how important this legislation is to protecting Marylanders. Although today is cross over day, this bill still has a good chance of passage if it makes it through the committee vote tomorrow because House leaders have promised to move quickly once the SFC votes.

Senate Finance Committee members’ contact information is below:

Thomas M. Middleton, Chair

John C. Astle, Vice-Chair

George W. Della, Jr. (SB 701 co-sponsor)
Nathaniel Exum (SB 701 co-sponsor)
Robert J. Garagiola
Barry Glassman
Delores G. Kelley (SB 701 co-sponsor)
Allan H. Kittleman
Katherine A. Klausmeier
E. J. Pipkin
Catherine E. Pugh (SB 701 sponsor)

Thank you for your efforts on this critical issue!

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State House passes foreclosure reforms

The House of Delegates has passed legislation requiring mediation between eligible borrowers facing foreclosure and their mortgage lenders. -- Read more here.

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Saturday, March 27, 2010

General Assembly's move to regulate debt settlement featured in Washington Post

The Washington Post has an excellent story about the debt settlement legislation in the General Assembly. MCRC recently did a report on debt settlement and the need to regulate it in Maryland. This is a timely issue; the Senate Finance Committee is scheduled to vote on its debt settlement bill this Tuesday.



Ylan Q. Mui reports: ... The Maryland General Assembly is considering a bill that would cap the firms' fees, which are often paid before they make a single call to a creditor. In one year, complaints about such companies to the state attorney general's office have quadrupled to 121. Investigations have been launched in Illinois, Vermont, Maine, New York and Florida.

"It's a sign of the times. . . . People found themselves in deeper and deeper debt," said Marceline White, executive director of the Maryland Consumer Rights Coalition. "As they were trying to dig out, these firms rose up."

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032605632.html

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Friday, March 26, 2010

New consumer-friendly gift card rules

MCRC board member Eric Friedman, director of the Office of Consumer Protection for Montgomery County, discusses new gift card regulations that benefit consumers. He also tackles the issue of "skimming" at ATM machines.

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Payday lending bill gets OK from Senate Finance

The Senate Finance Committee yesterday approved HB 79 with no amendments. This is great news for Maryland's most vulnerable consumers because the bill closes the loophole that has been allowing predatory lenders to charge interest rates of up to 700% instead of abiding by the state's cap of 33%.

MCRC has been working hard on this issue and hopes the House Economic Matters Committee will follow suit with SB 678. To read MCRC's testimony on payday lending, go here.

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Thursday, March 25, 2010

Bad news for consumers

Lorraine Mirabella of The Baltimore Sun reports: A state proposal to ban employers' use of credit histories to screen job applicants or fire workers has been rejected by a Senate committee, lessening chances for a similar measure under consideration in the House of Delegates.

Read more: http://www.baltimoresun.com/business/bal-credit-bill-0325,0,1709594.story

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Wednesday, March 24, 2010

Behind Consumer Agency Idea, a Relentless Advocate

New York Times: ... The defining event of Elizabeth Warren’s life may have taken place before she was born, when a business partner ran off with the money her father had scraped together to start a car dealership. She arrived a few years later, in 1949, another mouth for a strapped family to feed. But she used that mouth to talk her way into a debate scholarship at George Washington University at age 16.

She became a speech therapist, then a lawyer — she hung a shingle and did wills and real estate closings — then a part-time law instructor, and finally a leading scholar of bankruptcy. Her research helped change the stereotype of bankrupt people as feckless deadbeats: many, she showed, are middle-class workers upended by divorce or illness.

Read more: http://www.nytimes.com/2010/03/25/business/25warren.html?hp

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Bank of America will reduce some mortgage balances

New York Times: The program, while limited in scope and available by invitation only, signals a significant shift in efforts to deal with the millions of homeowners who are facing foreclosure. It comes as banks are being urged by the White House, members of Congress and community groups to do more to stem the tide.

Read more: http://www.nytimes.com/2010/03/25/business/25housing.html?hp

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Finance reform fate still murky

Politico: It took only 21 minutes for Democrats to approve a 1,336-page financial reform bill Monday, in a committee vote that drew zero Republican support.

It’s going to take quite a while longer for the bill’s next step to become clear.

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Tuesday, March 23, 2010

MPT presents "Building Credit for Life"

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Monday, March 22, 2010

Let Sen. Cardin and Sen. Mikulski know you support strong financial reform!

Special Interests Swarm Senate Banking Committee as Debate Starts on Financial Reform Legislation Consumer’s Guide Shows Whether Americans Win or Lose on Key Provisions

Washington, DC – The Consumer Federation of America (CFA) today commended the Senate Banking Committee for moving quickly to enact comprehensive legislation to overhaul the regulation of financial services.

Unfortunately, only 18 months after bringing the economy to the brink of collapse, large bank and Wall Street lobbyists are working hard to gut this legislation. As the Senate Banking Committee begins consideration of the "Restoring American Financial Stability Act," CFA released a handy "consumer’s guide" to help concerned citizens determine whether the American people or the big banks will be the real beneficiaries of this legislation.

"Recklessness among big banks and Wall Street firms and regulatory failures by federal agencies triggered a prolonged recession that continues to cause great hardship for many Americans," said CFA Legislative Director Travis Plunkett. "The American people are looking to the Senate to strengthen consumer and investor protections and restore the safety and soundness of the
financial system by closing gaps in the regulatory system."

Currently, it is unclear how many of the 500 amendments to the bill that have been proposed will actually be considered. Some could be adopted as part of the underlying bill, others could be offered and withdrawn without a vote, and some may never be offered for debate. CFA has identified amendments in two key areas where Senators will face a stark choice between consumer and business interests. To read more, click here.

Contact Sen. Mikulski here and contact Sen. Cardin here.

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Saturday, March 20, 2010

10 places not to use your debit card

Yahoo reports: ... "It's important that consumers understand the difference between a debit card and a credit card," says John Breyault, director of the Fraud Center for the National Consumers League, a Washington, D.C.-based advocacy group. "There's a difference in how the transactions are processed and the protections offered to consumers when they use them." -- full story

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Vote on payday-lending-loophole bill coming soon

Senate Bill 678 is scheduled for a vote this Monday, March 22. The bill closes a loophole that allows payday lenders in Maryland to charge interest rates of up to 700%.

If you haven't already, please tell your state senator that you support SB 678!

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Thursday, March 18, 2010

Call your delegate about refund anticipation loans!

Refund anticipation loans (RALs) could get a vote in the state House today. Let your state delegate know that you want to improve disclosures on RALs! SB 762/HB 1206 lets consumers know that they are taking out a loan and that they can get their refund back just as fast with electronic filing and direct deposit.

The bill has passed the Senate and we are waiting for a vote in the House. Please call today! Find your delegate here.

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Wednesday, March 17, 2010

Payday lending legislation moves forward, again

More good news for consumers: Senate Bill 678 was voted out of the Finance Committee last night. The bill closes a loophole that allows payday lenders in Maryland to charge interest rates of up to 700%. The companion legislation, House Bill 79, was voted out of the Economic Matters Committee on Friday.

Senators voting in favor of SB 678 are:
George W. Della, Jr.
Nathaniel Exum
Robert J. Garagiola
Barry Glassman
Delores G. Kelley
Allan H. Kittleman
Katherine A. Klausmeier
Thomas M. Middleton
Catherine E. Pugh

Voting against:
Sen. John C. Astle

Not voting:
Sen. E. J. Pipkin

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18- to 24-year-olds most at risk for ID theft, survey finds

The Washington Post reports: "... The "core millennial" group, identified as people ages 18 to 24, is at the greatest risk because it takes them longer to figure out that they have been defrauded -- meaning their information is compromised for a longer period, according to the survey, which is a snapshot of the identity fraud landscape from last year." -- full story

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Tuesday, March 16, 2010

Payday lending voted out of Economic Matters Committee!

Good news for consumers: House Bill 79 was voted out of the Economic Matters Committee on Friday by a vote of 15-7. The bill closes a loophole that allows payday lenders in Maryland to charge interest rates of up to 700%. The companion legislation, SB 678, will likely get a vote in the Senate Finance Committee by this Thursday.

"We are extremely pleased that this legislation is moving forward so that vulnerable consumers will have protection from these predatory lenders," said MCRC Executive Director Marceline White. "We heartily thank the Delegates that supported this bill and we're excited to see it move forward. We urge passage in the full House and Senate."

Delegates voting in favor of the bill were:
Charles Barkley
Aisha Braveboy
Emmett Burns
Brian Feldman
Hattie Harrison
Sue Hecht
James King
Ruth Kirk
Carolyn Krysiak
Mary Ann Love
Roger Manno
Brian McHale
David Rudolph
Herman Taylor
Michael Vaughn

Delegates voting against the bill were:
Jeannie Haddaway-Riccio
Richard Impallaria
Sally Jameson
James Mathias
Warren Miller
Donna Stifler
Mary Roe Walkup

Excused:
Del. Joseph Minnick



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Monday, March 15, 2010

Great article in the Sun about jobs and credit checks

There is an excellent story in The Baltimore Sun today about Sen. Mike Lenett's important legislation that would prohibit employers from using credit checks during the hiring process, unless it has a direct impact on the position. This is one of MCRC's top legislative priorities.
"Credit reports were meant to determine credit-worthiness, not job-worthiness," said state Sen. Mike Lenett, a Montgomery County Democrat who sponsored a bill heard last month by the Finance Committee. The senator said he has heard numerous stories of people being offered a job and "at the last minute having the rug pulled out from under them and denied a job on the basis of their credit report." -- full story

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Friday, March 12, 2010

Obama said to be considering Bloom Raskin for Federal Reserve Board of Governors

The Washington Post is reporting that Maryland Commissioner of Financial Regulation Sarah Bloom Raskin, who was MCRC's Consumer Advocate of the Year for 2009, is being considered for the Fed's Board of Governors. Read the Post article here. The story was first reported by Bloomberg News.

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Know your rights when debt collectors call

It's the last day of National Consumer Protection Week and we'd like to conclude with this video by the FTC that lets consumers know what rights they have when the debt collectors come calling.

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Thursday, March 11, 2010

New credit card rules explained

We are just over the halfway mark of National Consumer Protection Week, and today we're sharing a great piece from the Federal Reserve about what the new credit card rules mean for consumers.

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Payday lending could get vote in Maryland Senate by this wekeend!

Senate Bill 678 could get a vote by Sunday in the Senate Finance Committee. We urge you to let your senator know you support this bill and encourage him or her to give it a favorable vote.

Here's an interesting article in the New York Times about what's happening with payday lending on the national level and illustrates why regulation in Maryland is so badly needed:
Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show. -- full story

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Dodd to unveil financial reforms next week


Senate Banking Committee chairman Sen. Christopher J. Dodd (D-Conn.) said Thursday morning that he plans to move forward next week with sweeping legislation to revamp the nation's financial regulatory system, even as lingering differences remain with key Republicans. -- full story

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Tuesday, March 9, 2010

Diane Rehm Show looks at new credit card regulations


New restrictions on credit card companies take effect. What the new law means for consumers and banks, and loopholes to watch out for. Click here to listen to a recording of the program.

Guests:

Robert Manning, author of "Credit Card Nation" and "Living With Debt," and the founder of the Responsible Debt Relief Institute.

Edmund Mierzwinski, Director, U.S. PIRG Consumer Program

Nessa Feddis, Senior Federal Counsel, American Bankers Association

Nancy Trejos, Washington Post correspondent and author of the book "Hot Broke Messes: How to have your latte and drink it too."

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A cautionary tale about debt settlement

National Consumer Protection Week continues, and below is a video from Consumers Union that shows just what can happen when people turn to debt settlement firms. To see more about MCRC's work on debt settlement, click here.

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Monday, March 8, 2010

Del. Frick on Ben Stein's "Dirty Money"

Del. Bill Frick and Del. Sheila Hixon have introduced a bill to regulate "negative option marketing." Del. Frick has this piece on Charm City Current:

"Unfortunately, Stein has a new starring role – ripping off consumers. Stein now can be found on TV’s across our area as a pitchman for FreeScore.com, a site that urges consumers to obtain a “free” credit score from their website. The problem is, it isn’t free. FreeScore requires consumers to sign up for a credit monitoring service, at the bargain price of $29.95 a month. Anyone that does not want to get this service – which, incidentally, no one needs – must take affirmative steps to cancel the agreement." -- read more

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Baltimore Sun editorial urges regulation of payday loans

Today marks the first day of National Consumer Protection Week, so it was heartening to see The Baltimore Sun's editorial this morning about the need to close a loophole in Maryland law that allows payday lenders to charge outrageous fees. This is one of MCRC's top legislative issues.


"... Take, for instance, the Anne Arundel County cancer survivor paying 682 percent interest on $578, or the city resident who took out an $875 loan last June on an interest rate of 675.77 percent and still owes most of the principal.

Officials don't know exactly how much money is changing hands under those kinds of terms in Maryland, but this much is clear: Even the poorest, most downtrodden soul should not have to pay that much for a personal loan. Lawmakers need to end this disgraceful practice immediately." -- full editorial

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Sunday, March 7, 2010

MCRC consumer reception featured in Daily Record

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Thursday, March 4, 2010

Fed proposes limits on credit card penalty fees

Ylan Q. Mui reports: The proposed regulations represent the Fed's latest efforts to comply with the sweeping credit card reform legislation passed by Congress last spring. The final phase of the legislation, slated to take effect in August, requires that any penalty fees be "reasonable and proportional" -- and lawmakers left it to the Fed to determine exactly what that meant. -- full story

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Wednesday, March 3, 2010

Consumer bills move forward in General Assembly

Three of MCRC's top legislative priorities -- debt settlement, payday lending and refund anticipation loans -- moved forward in the legislature on Tuesday. Read details here.

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Tuesday, March 2, 2010

Legislation would shine light on tax refund loans

Eileen Ambrose of The Baltimore Sun reports on Refund Anticipation Loans and a bill to regulate them, which MCRC strongly supports:
Tax season is upon us, and some filers literally can't wait.

These are the people who take out high-priced loans to get their tax refunds several days early. While demand for so-called refund anticipation loans has been dropping, millions of taxpayers - including thousands in Baltimore - still sign up for them. -- full story

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Monday, March 1, 2010

Payday lenders find a new source of business


"The payday loan industry has found a new and lucrative source of business: the unemployed.

Payday lenders, which typically provide workers with cash advances on their paychecks, are offering the same service to those covered by unemployment insurance." -- full story

In Maryland, MCRC will testify in favor of HB 79, which would close a loophole that payday lenders are using here to charge interest rates of up to 700 percent.

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