organization:consumer financial protection bureau

  • Haunted by Student Debt Past Age 50
    https://www.nytimes.com/2017/02/13/opinion/haunted-by-student-debt-past-age-50.html

    Americans age 60 and older are the fastest-growing age group of student loan debtors. Older debtors, many of whom live hand-to-mouth on fixed incomes, are more likely to default. When that occurs with federal loans, as happens with nearly 40 percent of such borrowers who are 65 and over, the government can seize a portion of their Social Security payments — even if it pushes them into poverty. About 20,000 Americans over the age of 50 in 2015 had their Social Security checks cut below the poverty line because of student loans, with poverty-level benefits falling even further for 50,000 others, according to a recent report by the Government Accountability Office.

    A report issued last month by the Consumer Financial Protection Bureau shows that the number of Americans aged 60 and older with student loan debt has grown fourfold over the last decade, to 2.8 million in 2015 from about 700,000 in 2005. The average amount owed by these borrowers has nearly doubled, to $23,500.

    Some older borrowers are carrying their own education loans, but most fell into debt helping their children or grandchildren, either by borrowing directly or co-signing loans. As these borrowers age, they have increasing difficulty keeping up loan payments while also paying for food, housing, medication, and dental and medical care.

    #dettes #endettement #retraite #Etats-Unis #santé

  • Why a housing scheme founded in racism is making a resurgence today - The Washington Post
    https://www.washingtonpost.com/news/wonk/wp/2016/05/13/why-a-housing-scheme-founded-in-racism-is-making-a-resurgence-today

    “Pretty much everywhere I go, people say ’I’ve been hearing about this,’” Satter says. “Contract” selling is making a comeback.

    In this model, buyers shut out from conventional lending are offered an alternative: They can make monthly payments on a home directly to the seller, instead of a bank, with the promise of receiving the deed only once the property is entirely paid off, 20 or 30 years down the road. In the meantime, they have few of the legal protections of a typical home buyer but all of the responsibilities of one. They don’t build equity with time. They can be easily evicted. And if that happens, they lose all of their investment.

    According to the Detroit Free Press, more homes were bought in Detroit last year using such “land contracts” or “contracts for deeds” than conventional mortgages. In a series of recent stories, the New York Times has reported that Wall Street is now betting on this market, with investors buying foreclosed homes by the thousands and selling them on contract. Earlier this week, the Times reported that the Consumer Financial Protection Bureau is now investigating the practice’s resurgence, although it is not by definition illegal.

    What is particularly alarming about the trend, though, is that we’ve seen it before. In its earlier incarnation, it was an explicitly racist form of exploitation. And now it is victimizing the same groups again: mostly lower income and minority home buyers who can’t access traditional credit.

    “There’s nothing new here in the slightest,” Satter says. “This is just a continuation of the same old game. That’s what’s so disturbing.”

    In the earlier era when this was common, between the 1930s and 1960s, contract lending was in some cities the primary means middle-class blacks had to buy homes. Real estate agents and speculators jacked up the price of properties two- or threefold. Then when families fell behind on a month’s payment or on repairs, they were swiftly evicted. The sellers kept their deposits and found the next family.

  • 6 Unbelievable Ways the Big Banks Are Scamming You | Alternet
    http://www.alternet.org/corporate-accountability-and-workplace/bank-scam?paging=off

    1. Falsifying Paperwork, Blitzing, Lying About Payments to Force Homeowners Into Foreclosure

    ...

    2. Bank Protection “Service” Puts Consumers at “Greater Risk Of Harm”

    Last week a report from the new Consumer Financial Protection Bureau (CFPB) found that the big banks are still scamming their customers with ridiculous fees that are hugely profitable for the big banks.

    (...)

    According to a McClatchy News report on a call with CFPB director Richard Cordray to discuss the report, Cordray said, "What is marketed as overdraft protection can, in some instances, put consumers at greater risk of harm.”

    How much risk? People who are “heavy overdrafters” but still opt out of this service save on average more than $900 a year. But it isn’t just heavy overdrafters who are saving. According to the CFPB report “… the reduction in fees for those who did not opt in was $347 greater, on average, than for those who did opt in.” People who opt in are also more likely to lose their bank accounts, with the bank “involuntarily” closing it. 

    Banks have made $32 billion from these fees. So maybe this isn’t about providing a “protection” to consumers at all. As NPR puts it, “Overdraft and non-sufficient funds fees accounted for 61 percent of total consumer deposit account service charges in 2011 among the banks in the CFPB report.”

    3. Transaction Ordering

    Not only do customers who opt-in pay more for this “protection service,” but the banks are still scamming them by causing the overdrafts that generate these fees. The CFPB report says that some banks still use “transaction ordering” to cheat customers out of additional fees. These banks post checks or debit transactions from large to small to trigger these fees. In other words if you write several small checks (or make debit card transactions) and then a big one that overdraws your account, they credit the large one first so each of the smaller transactions causes its own fee to be charged, even though those transactions occurred before the account ran out of money.

    From the report, “The earlier in a sequence that an account becomes negative, the more overdraft or NSF transactions may occur.”

    4. Forced Arbitration

    Another big-bank scam on consumers is “forced arbitration” clauses in bank account, credit card, mortgage and other financial-service agreements. Forced arbitration clauses – also called mandatory arbitration or binding arbitration – require you to give up your legal right to take a big bank to court if it cheats or harms you. And if you don’t agree (which requires reading the entire agreement) you can’t get the account.

    They way this works is that instead of being able to pursue your legal rights, you have to take your complaint to an arbitrator, and then must accept the arbitrator’s decision. The catch is that the bank gets to pick the arbitrator, and the arbitrators naturally know they’ll never work in this town again if they ever rule against the banks. So there is an inherent conflict of interest working in favor of these companies.

    How is that conflict of interest working out for us? A 2007 Public Citizen report revealed that arbitrators working for the National Arbitration Forum (NAF) had ruled against consumers 94 percent of the time.

    In another blow to the big banks, the CFPB is beginning to take steps to reign in forced arbitration clauses in consumer financial contracts.

    The five-year-old Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the CFPB and the Securities and Exchange Commission to regulate mandatory arbitration. The SEC is resisting implementing their part of this law, but the CFPB is conducting a survey to determine consumer awareness of forced arbitration clauses in credit card agreements. On its blog, the CFPB said the study will “explore consumer awareness of dispute resolution terms in credit card agreements. The survey will gather information about consumers’ perceptions, preferences, and assumptions related to arbitration proceedings.”

    5. Marketing Refinancing That Costs People

    Thom Hartmann has exposed yet another banker scheme. This time banks are marketing a mortgage refinancing that promises annual savings of more than $4,000. But the scheme really just adds more than $37,000 to the cost of a loan.

    Basically, the mailer focuses on lowering monthly mortgage payments, while neglecting to mention that the borrower would end up paying a higher overall interest rate, and would be adding 10 more years to the overall length of their loan. Hartmann writes,

    Back in November of 2012, the Consumer Financial Protection Bureau sent warning letters to around a dozen of America’s largest mortgage lenders and brokers, advising them to “clean up” potentially misleading advertisements, especially those targeting veterans and older Americans.

    At the time of the CFPB’s announcement, CFPB director Richard Cordray said that, “Misrepresentations in mortgage products can deprive consumers of important information while making one of the biggest financial decisions of their lives.”

    And, as we also know, deceptive mortgage advertisements like this can cause consumers to bite off more than they can chew, ultimately leading to a nationwide financial meltdown.

    6. Banks Trying To Kill the CFPB

    Over the years, scam after scam is exposed, and nothing has been done about it. But there is a new cop on the beat, the Consumer Financial Protection Bureau. The CFPB’s job is to police the big banks, and protect financial consumers. Of course the big banks are trying to head this agency off at the pass.

    The Republican Party and its conservative infrastructure have basically been contracted by Wall Street’s big banks to obstruct and even kill this agency. Senate Republicans have been blocking the confirmation and are still trying to obstruct the nominee to head up the agency. Republicans have been filibustering the nomination of Richard Cordray to be its director and even vowing to filibuster to keep any nominee from being confirmed to head the agency. President Obama finally made a recess appointment of Cordray in January 2012. But this recess appointment runs out at the end of the year with no end to Republican obstruction in sight.

    Republicans are also trying to defund the agency. Republicans and the (billionaire, Wall Street, oil and tobacco-financed) conservative movement have also launched a propaganda campaign against the agency. (...)

    Sen. Elizabeth Warren – the person most credited with the creation of the CFPB – spoke at a Senate hearing on the CFPB last March on the role of the CFPB and Republican obstruction of the agency:

    “I see nothing here but a filibuster threat against Director Cordray as an attempt to weaken the consumer agency,” Warren said. “I think the delay in getting him confirmed is bad for consumers, it’s bad for small banks, bad for credit unions, for anyone trying to offer an honest product in an honest market.”

    (...)

    Don’t expect much to change until we have a government that is willing to take on these financial giants. As long as we keep seeing “settlements” with these giants instead of prosecutions, and as long as we allow big money to buy influence over our government, nothing will change .

    #banksters #corruption_légale #impunité