Tell the Fed about unauthorized overdraft practices

via email from The Center for Responsible Lending

Today is the last day to send your

unauthorized overdraft story to the Fed.

Read today’s USA Today story on another unfair bank overdraft practice and tell your story to the Fed below:

The Fed knows something smells fishy with overdraft – but do they know just how bad it stinks?

In new proposed rules, the Federal Reserve Board has acknowledged that banks are using unfair overdraft practices. But their solution doesn’t go far enough.

Thousands of consumers have sent the Fed their stories during the official comment period for the proposed rules. Thank you if you were one of those consumers – it will really make a difference.

The comment period ends at 5 pm ET today, so you can still send a story now and encourage the Fed to stop unauthorized overdrafts.

The new rules would not keep banks from enrolling customers in their most expensive option for covering overdrafts without prior consent, but would only allow them to opt out of the program after the fact. Consumers should not have to “unsubscribe” from this costly system.

Under prevailing practices, banks can intentionally maximize the overdraft fees you pay by automatically approving debit card purchases that throw your account balance into the negative and by manipulating their debit-clearing systems. At the least, the Fed should make them get your approval before charging you these fees, which now average $34 per incident.

If you’ve been burned by unauthorized overdrafts, click here to tell the Fed. Thanks to the many who have already written.

The comments you submit will be part of the Federal public record made available to the public online and in paper form. Your name and address may be included as part of your comments.

For more information – Shredded Security

The devil and the Compact to Help Ohioans to Preserve Ownership

Bill Callahan’s well stated “Now the devil is… where the devil always is” observation on the Governor’s Compact to Help Ohioans to Preserve Ownership offers a key insight to the value of these non-binding measures. The compacts are non-binding, but as Callahan points out

the servicers are committing themselves to report progress to the Commerce Department and otherwise stay engaged with Strickland, Zurz and Dann. Presumably these officials will be checking in regularly with local governments and community agencies, and looking to broker (or jawbone) cooperation where it’s lacking. Will this work? It could. The Compacts establish an agreed-upon set of benchmarks — public expectations, in effect — for good servicer behavior. These benchmarks are definitely a big improvement over the industry’s standard practices to date. The reporting obligation, combined with a strong capacity for public monitoring and feedback (at least here in Cuyahoga County), should create some pressure on the servicers to honor their “nonbinding” commitments. If they don’t, a public record of their failure will be created — a record to support the need for binding action by the State.

I read the Citi compact and agree that the benchmarks are a big improvement over standard practices, but I wonder, given the problem of unemployment, whether early contact and free nonprofit counseling will make any difference at all. I echo Callahan’s observation that the public monitoring of these nonbinding compacts will build a record to support the need for binding action by the state.

Reviewing the compact with my jaded lawyer eyes I see this:

Citi’s specially trained servicing unit will work with borrowers to find solutions short of foreclosures and try to ensure that no borrower loses his or her home.

If a borrower has the desire, ability and intent to make their mortgage payments, Citi will work with them to keep them in their home.

To the extent permissible within existing fiduciary, contractual or other legal obligations and in accordance with prudent mortgage lending and servicing practices Citi will: waive fees and/or penalties; provide fixed rate loan modifications; modify loans based on the homeowners’s ability to repay; forgive some loan principle; or assist homeowners to remove negative information on their credit reports.

But read this:

Citi’s specially trained servicing unit hey we got a 100 million dollar subsidy to pay for counseling and all those out of work lawyers come CHEAP – talk as long as you want will call work with borrowers night and day, especially on holidays and call your neighbors to put notes in your door if you don’t’ answer the phone to find solutions such as charging you a one time fee you can’t afford and add another year or two on the mortgage short of foreclosures and try to ensure that no borrower loses his or her home.

If a borrower is not one of those lazy poor people has the desire, ability and intent to make their mortgage payments, Citi will work with them to keep them in their home.

To the extent that it doesn’t affect our CEO’s huge inflated salary or upset our stockholders permissible within existing fiduciary, contractual or other legal obligations we always have a GOOD reason for not helping you and in accordance with prudent mortgage lending and servicing practices but you know that is not going to happen because we have to take what we can get before your fold Citi will: waive fees and/or penalties; provide fixed rate loan modifications; modify loans based on the homeowners’s ability to repay; forgive some loan principle; or assist homeowners to remove negative information on their credit reports, ha ha just kidding we aren’t going to do this but it makes us look good to say we will try.

Why George, Why?

Another must read from Callahan’s Cleveland Diary – take a good hard look at how many foreclosures were filed within blocks of George Voinivich’s Cleveland home. They say a picture paints a thousand words – this one paints a million. Look at the picture and then call George and ask him why he voted no on the bankruptcy reform measure.

More Callahan – a review of what passed and what didn’t and who benefits and foreclosures by zip code.

My take on the stories behind the foreclosure crisis.

Advocacy Groups Urge Bankruptcy Relief for Homeowners

In response to bankruptcy reform measures permitting restructuring or deferment of home mortgages being dropped from the Senate’s foreclosure compromise bill 15 civil rights, consumer and housing groups – Center for Responsible Lending, Leadership Conference on Civil Rights, ACORN, American Federation of Labor and Congress of Industrial Organizations, Consumer Action, Consumer Federation of America, Consumers Union, Lawyers’ Committee for Civil Rights Under Law, NAACP Legal Defense & Educational Fund, Inc., National Association of Consumer Advocates (NACA), National Association of Consumer Bankruptcy Attorneys, National Association of Neighborhoods, National Community Reinvestment Coalition, National Council of La Raza, National Fair Housing Alliance – issued a joint statement condemning the eviscerated bill:

Sadly, as long as policymakers rely on inadequate voluntary measures, we will continue to see foreclosures tear down communities and wipe out the most important source of financial security that most Americans have. Twenty thousand homeowners with subprime loans are losing their homes every week. It is not too late to do the right thing. We urge both the Senate and the House to take fast action to lift the ban that now holds homeowners hostage to voluntary relief from their loan servicers and investors that may never come.”

Call your representatives. Take action at the Center for Responsible Lending.

Economic Forecast

No economic incentive package will make enough of a difference to affect the long term well being of the working class poor. The problem is so far beyond what a tax rebate will help. Why? Because the only industries left in this country are money lending or credit reporting. Think I am wrong? Watch day time television and count the advertisements for credit reporting and/or short term loans, which by the way – you should only use responsibly.

The banks have the poor in a stranglehold and once you are behind you cannot get ahead.

Bounce a check and watch the bank fees multiply by magic until all the money you thought you had is gone. This is done by computer ordering of the way checks come into a bank – they deduct the biggest check (or debit) first – then – bingo – that five dollar charge for diapers just cost you another forty bucks in late fees. Add a couple more charges for gas, food and forty buck add on for each of them. Now, not only are you broke – you are in debt. The bank has emptied your account and if you can’t pay their usurious charges they report you to check systems.

Bingo – you are blacklisted.

Now you cannot get a checking account anywhere. In the meantime you can’t pay your bills on time and the late fees (on top of the higher interest rates you already pay because of your credit rating) also increase exponentially. But it doesn’t stop there – now your credit is bad and the car insurance companies use this as an excuse to charge you more for your insurance.

It is a wonder there aren’t more economic suicides.

Wake up Washington – the terrorism we should be fighting is the repeated rape of the working class.