MCRC

MCRC and other consumer advocates celebrate the Consumer Financial Protection Bureau and call for full funding and the appointment of a director

2011-07-20T09:59:00.000-07:00

Tomorrow is the anniversary of the Consumer Financial Protection Bureau. Below are the remarks I made today at a press event in Baltimore calling for the ufll funding of the CFPB and the appointment of a director for the agency.

Remarks for CFPB Anniversary

Marceline White, Executive Director, Maryland Consumer Rights Coaltion (MCRC)

July 20, 2011

Good morning. My name is Marceline White, and I am the Executive Director of the Maryland Consumer Rights Coalition (MCRC). MCRC is a statewide consumer coalition that advances and protects fairness and justice for Maryland consumers through research, education, and advocacy.

Needless to say, given our mission, I’m delighted to be here today. MCRC advocates for statewide policies that protect Maryland families. Recently we produced a film “Stealing Trust” which captures the voices of hard-working Marylanders who’ve lost their homes, their life savings, and their capacity to trust others to mortgage lenders, debt settlement companies, and unscrupulous home contractors.

The Marylanders in our film illustrate the need for stronger oversight and regulations. Despite playing by the rules, they lost everything to unscrupulous businesses. No one was watching out for their interests. The CFPB will. It has a simple mandate-provide American families with the information they need to make clear choices about financial products.

Maryland families, like those across the country, have been hard-hit by the economic recession. Families that are struggling to do the right thing-save their homes, pay off their debts, and maintain good credit-find themsleves further and further behind. Today, many Maryland families that work hard and play by the rules find themselves a divorce, a death, a job loss, or a medical emergency away from poverty.

It is abundantly clear that the unregulated markets may work for Wall Street but not for the majority of Maryland families. We need the Consumer Financial Protection Bureau so that there is an agency looking out for our financial health so that we can continue to work hard and build assets, rather than lose our assets to peddlers of dangerous financial products which were designed to deceive.

Congress has a clear choice-they can confirm a director so that the CFPB can do the work that it was mandated to do, or they can stall progress for millions of families around the country. Main Street has spoken and it supports this new agency-the question remains whether or the Congress which bailed out millionaires and banks will now attend to the the needs of millions of working families.

MCRC believe that the following areas are critical ones for the CFPB to address:

Research into disparate impacts-there has been some research into the disparate impacts of foreclosures based on race, sex, ethnicity and geography. This type of research is critical and should be employed in all sectors so that policymakers can use the data to design appropriate policies and programs.

Clear contracts-contracts should be simple and accessible so that consumers can make a real, informed choices. No one should have to be a lawyer or have a Ph.D to understand their mortgage or their credit card statement.

Accountability and Consequences-if consumers fail, we face consequences-we lose our homes; our credit scores decline, our wages are garnished. Banks, lenders, financial institutions and others need to be held accountable for their mistakes and face meaningful consequences.

MCRC will continue to advocate for Maryland consumers and partner with state leaders and others to promote the work of the CFPB.

Thank you

Elizabeth Warren in Baltimore-Support the CFPB and follow their work

2011-07-06T06:43:00.001-07:00

We had a great night at last Thursday’s Town Hall event featuring White House adviser Elizabeth Warren, as more than 400 Marylanders crowded in to Baltimore’s downtown public library to give a hero’s welcome to Professor Warren, MCRC Executive Director Elizabeth Warren and the other consumer advocates at the forum hosted by Rep. Elijah Cummings

The large and enthusiastic crowd spilled out even of the overflow room the library created for the event as it gave several standing ovations to the architect of the new Consumer Financial Protection Bureau. Here’s a link to The Sun’s article on the “rock star treatment” the crowd gave Prof. Warren:

http://www.baltimoresun.com/business/consuming-interests-blog/bal-consuming-interests-elizabeth-warren-20110630,0,7703619.story

MCRC Executive Director Marceline White won strong applause for her remarks on MCRC’s work to protect Maryland consumers and on what the new CFPB can do to help consumers most. She told the crowd about our new documentary film “Stealing Trust” on victims of financial fraud in Maryland and gave copies of the film to Prof. Warren, Rep. Elijah Cummings and Lt. Gov. Anthony Brown as “a reminder as you fight for the Consumer Protection Bureau of who you are fighting for.” You can read Marceline’s remarks here:

http://www.marylandconsumers.org/LinkClick.aspx?fileticket=ZLSC3MEjB3c%3d&tabid=38

Two of the consumers featured in our film, Kevin Matthews and Lee Tarver, were also on hand to lend the weight of their personal stories of abuse by financial predators to the case for the Consumer Financial Protection Bureau. The forum also gave MCRC staff people a chance to meet dozens of consumers and hear their own concerns and complaints.

In her remarks last Thursday, Prof. Warren stressed that one of the best ways consumers can support her work and support the new CFPB is to go the agency’s website and contribute to its work. You can check out the CFPB’s web site here:

http://www.consumerfinance.gov/

You can also learn more about the stories Kevin Matthews, Lee Tarver and the other consumers featured in our film “Stealing Trust” have to tell by attending one of our upcoming film screenings. The next presentation is just days away. It will happen:

Monday July 11 at 6 p.m. at the Southeast Anchor Library, 3601 Eastern Avenue, Baltimore, MD.

Other July film screenings include:

Monday July 25 at Noon at the Annie E. Casey Foundation, 503 N. Charles St., Baltimore MD.
Tuesday July 26 at 7 pm at the Montgomery County Civic Building, One Veteran’s Plaza, Silver Spring MD.

Town Hall Meeting, Film Screenings Offer Chance to Fight Back against Financial Predators

2011-06-23T12:01:00.001-07:00

Town Hall Event with Elizabeth Warren just one week away

Please join us on Thursday June 30 at 6:30 pm at the Enoch Pratt Central Library in downtown Baltimore for a special Town Hall Meeting. Hosted by Rep. Elijah Cummings, the forum will feature White House Adviser and leading consumer advocate Elizabeth Warren speaking about “Fighting for America’s Working and Middle Class Families.” Here’s a link to a flyer about the event:

http://cummings.house.gov/2011/06/630---town-hall-meeting-with-elizabeth-warren.shtml

Professor Warren is the architect of the new Consumer Financial Protection Bureau and a powerful voice for honest and transparent financial practices. She will explain how the new bureau will help consumers get the kind of clear and accurate information about mortgages, credit cards and other financial products that will protect us against predatory financial practices and why the enemies of financial reform are so determined to cripple the agency before it even starts its work.

We’re proud and excited that MCRC Executive Director Marceline White will be one of just a handful of speakers to share the program with Professor Warren.

Marceline will talk about the role the new CFPB can play in protecting Maryland consumers and about our work to prevent abusive mortgage lenders, debt settlement companies, contractors and other financial predators from ripping off Marylanders.

MCRC Film Screenings:

“Stealing Trust: Marylanders Speak Out on Frauds, Scams and Financial Abuses”

For a powerful look at the devastating impact illegal foreclosures and other predatory financial practices have had on families and vulnerable consumers across Maryland, please also join us for one of the upcoming screenings of our new documentary film, “Stealing Trust.”

The film tells the poignant stories of Maryland families that have lost their homes, their life savings and even their capacity to trust others to mortgage lenders, debt settlement companies, and unscrupulous home contractors and explains how some consumers have successfully fought back.

Our next screenings will be:

Tuesday June 28 at 7 p.m. at Red Emma’s Bookstore, 800 St. Paul St., Baltimore MD.
Monday July 11 at 6 p.m. at the Southeast Anchor Library, 3601 Eastern Ave., Baltimore MD.

“Stealing Trust” has been praised by film critic Michael Sragow on The Baltimore Sun’s film blog and featured in the City Paper’s Weekly Calendar. WEAA-FM’s Marc Steiner Show featured the the film in its June 13 broadcast and Marc Steiner repeatedly urged listeners to check out our fine film. You can hear Marceline White and several of the consumers in the film discuss the project and their experiences with financial predators by clicking on the podcast of the show:

http://www.steinershow.org/radio/the-marc-steiner-show/june-13-2011-segment-1#attachments

We will be scheduling additional film screenings around the state throughout the summer and fall.

Please watch this space and our twitter and facebook posts for word about a screening near you.

Call your Senators to support the Consumer Financial Protection Bureau

2011-06-15T07:46:00.001-07:00

Less than one year after Congress passed the Dodd-Frank Wall St. reform and consumer protection law, the U.S. Senate is poised this week to consider two amendments to the Economic Development Revitalization Act (S. 782) that could deal a crippling blow to financial reform. Concerned consumers need to tell our Senators that banking reform, and the new Consumer Financial Protection Bureau, need to be implemented not undermined.

An amendment sponsored by Kansas Rep. Sen. Jerry Moran would gut the new Consumer Financial Protection Bureau before it even begins its work by eliminating its independent leadership and funding basis. It would replace the agency’s independent director with a six-member board dominated by many of the same regulatory agencies that failed to protect consumers during the recent financial crisis and give the same Congress where many Republicans strongly oppose the very existence of the agency complete control of its funding.

The Dodd-Frank law carefully designed the Consumer Financial Protection Bureau to give it enough protection from political pressure from the financial services industry that it would be able to stand up for consumers while making it fully accountable to the president and the American people. The Moran amendment would destroy that balance.

But South Carolina Senator Jim DeMint’s amendment goes even further: It would repeal the entire Wall St. Reform Act, including the Consumer Financial Protection Bureau, the derivatives trading reforms and other reforms Congress belatedly passed in 2010 to protect consumers from the kind of abuses that caused the devastating financial collapse of 2008.

Over the last four years, more than 10 million Americans have lost their homes to foreclosures. Almost 14 million people are officially unemployed today, and millions more have given up hope and stopped looking for work. As the nation struggles to emerge from the hardest economic times in 70 years, we need strong protections against the kind of predatory financial practices that did so much to cause the crisis.

In May, the Republican majority in the House of Representatives passed three amendments that would badly weaken financial reform and the new CFPB. Now the Senate needs to stand up for U.S. consumers.

Please call Sen. Barbara Mikulski’s office at 202.224.4654 and Sen. Ben Cardin’s office at 202.224.4524 to tell Maryland’s Senators that they need to make Wall St. reform work and to defend the new agency whose job is to defend the interests of consumers.

Foreclosure news below and MCRC Film TOMORROW

2011-06-13T09:29:00.001-07:00

MCRC Film Screening Event:
“Stealing Trust: Marylanders Speak Out on Frauds, Scams and Financial Abuses”

The Huffington Post reports this morning that New York State’s Attorney General has launched a new probe of the mortgage security practices of banking giant Bank of America that calls into question the legality of thousands of foreclosures. This study is just part of a larger investigation about whether Wall St. and the banking industry followed the law in creating mortgage securities investigation that could lead to trillions of dollars in additional losses from the housing crisis that continues to devastate our economy.

Here’s a link to the report: http://www.huffingtonpost.com/2011/06/13/bank-of-america-mortgage-investigation-schneiderman_n_875681.html

Please join us tomorrow night to get a powerful look at the devastating impact illegal foreclosures and other predatory financial practices have had on families and vulnerable consumers across Maryland in the next screening of our documentary film, “Stealing Trust.”

The screening will be:
• Tues. June 14 at 6:30 p.m. at the Enoch Pratt Central Library, 400 Cathedral St., Baltimore, MD.

The film tells the poignant stories of Maryland families that have lost their homes, their life savings and even their capacity to trust others to mortgage lenders, debt settlement companies, and unscrupulous home contractors and explains how some consumers have successfully fought back.

This afternoon you can hear MCRC Executive Director Marceline White and two of the consumers featured in the film discuss the film and talk about our work to protect Maryland consumers on the Marc Steiner Show on at 5 pm on WEAA-FM 88.9 in Baltimore. You can also listen on-line on WEAA’s web site @ http://www.weaa.org/

Please tune in and call the Steiner Show at 410-319-8888 to share your thoughts about what consumer protection issues are most important to you.

We’re excited by the very positive response the film won at our premiere event in May at Baltimore’s Creative Alliance. Sun film critic Michael Sragow has praised “crusading documentary” and compared it to the landmark film “American Casino” on his film blog:

http://weblogs.baltimoresun.com/entertainment/movies/blog/2011/05/stealing_trust_exposes_predato.html

We hope you’ll join us Tues. June 14 to see the film for yourself and to talk with MCRC leaders about what consumers and citizens across the state can do to fight back and to protect themselves against financial predators.

We will also be showing the film around the Baltimore area and across the state this Summer and Fall. Screening dates include:

• June 28 at 7 p.m. at Red Emma’s Bookstore, 800 St. Paul St., Baltimore MD.

• July 11 at 6 p.m. at the Southeast Anchor Library, 3601 Eastern Ave., Baltimore MD.

Please watch this space along with our website and our facebook and twitter pages for word about other screenings and a film event near you.

Statistics underscore film's message-see it and learn what you can do

2011-06-07T08:33:00.000-07:00

MCRC Film Screening Event:

“Stealing Trust: Marylanders Speak Out on Frauds, Scams and Financial Abuses”

The financial crisis that pushed this country into the hardest economic times in 70 years is far from over. USA Today reported last week that almost 4 million homes have been lost to foreclosures over the last five years. More than 6,500 Maryland families lost their homes to foreclosures in the first four months of 2011 and Baltimore is one of 25 cities that has gone from majority homeownership to a majority of rental properties in the wake of the housing crisis. Across the country, almost 14 million people are officially unemployed and millions of others have given up looking for work. The Great Recession may officially be over but families across the country are still reeling from the crunch caused by predatory lending and the collapse of the financial bubble.

Please join us one week from tonight to get a powerful look at the devastating toll predatory financial practices have taken on families across Maryland in the next screening of our new documentary film, “Stealing Trust.”

The screening will take place:

June 14 at 6:30 p.m. at the Enoch Pratt Central Library, 400 Cathedral St., Baltimore, MD.

The film tells the poignant stories of Maryland families that have lost their homes, their life savings and even their capacity to trust others to mortgage lenders, debt settlement companies, and unscrupulous home contractors and shows how some consumers have successfully fought back.

We’re excited by the great response the film won at our premiere event in May at Baltimore’s Creative Alliance. Sun film critic Michael Sragow has praised “crusading documentary” and compared it to the landmark film “American Casino” on his film blog:

http://weblogs.baltimoresun.com/entertainment/movies/blog/2011/05/stealing_trust_exposes_predato.html

Join us Tues. June 14 to see for yourself what the buzz is about and to talk with MCRC leaders about what consumers and citizens across the state can do to fight back and to protect themselves against financial predators.

We will also be showing the film around the Baltimore area and across the state this Summer and Fall. Screening dates will include:

June 28 at 7 p.m. at Red Emma’s Bookstore, 800 St. Paul St., Baltimore MD.
July 11 at 6 p.m. at the Southeast Anchor Library, 3601 Eastern Ave., Baltimore MD.

Please watch this space along with our website and our facebook and twitter pages for word about other screenings and a film event near you.

Elizabeth Warren discusses the need for clear contracts and common sense reforms at Rep. Van Hollen's Consumer Protection event

2011-05-18T14:25:00.000-07:00

MCRC had a great night meeting consumers, sharing information and learning from consumer protection leaders at the financial forum Rep. Chris Van Hollen hosted in Silver Spring Tuesday night.

MCRC staff met hundreds of consumers and shared information about how to buy a used car, the debt settlement industry, our legislative victories in Annapolis, our new documentary film on victims of financial fraud as well as ways to keep abreast of consumer issues in Maryland.

Presidential adviser Elizabeth Warren’s spoke about the financial challenges facing middle-class and working-class families and the important role the new Consumer Financial Protection Bureau can play in redressing those challenges. Professor Warren powerfully and clearly explained how 30 years of wage stagnation coupled with the rise of predatory financial and mortgage-lending practices led to the financial crisis that caused the most serious recession in the last 70 years. First, falling incomes pushed more and more families to go deep into debt, not only to maintain their standard of living but to pay big bills for medical care, education and other basic needs. Then, a deregulated lending industry used low up-front costs to entice millions of families into mortgage deals whose rising rates many families simply could not afford. Ultimately those deals crashed the nation’s economy, Warren insisted, “one bad mortgage at a time.”

Warren spoke passionately about the need for a federal regulatory agency whose first job is to protect consumers – rather than the bankers – and about her work to get the new Consumer Financial Protection Bureau (CFPB) off the ground.

Rep. Van Hollen strongly endorsed the CFPB and won great applause when he called on President Obama to appoint Ms. Warren to lead it, even if he has to name her as a recess appointment to get around the opposition of congressional Republicans hostile to Ms. Warren and the CFPB.

Maryland Attorney General Doug Gansler, Director of the Montgomery County Office of Consumer Protection (and MCRC Board Member) Eric Friedman and representatives from the Federal Trade Commission and the Montgomery County State’s Attorney’s Office also explained their consumer protection work to the large and attentive crowd and took questions about consumer concerns.

With so many fine speakers and engaged citizens on hand, the forum was a lively learning experience for all of us. Thanks to Rep. Van Hollen and the Montgomery County Office of Consumer Protection for hosting the forum and for inviting us to participate.

Consumer Reforms Work-Credit CARd Act saves money and helps consumers

2011-05-17T13:21:00.000-07:00

A new report from the Pew Center makes clear that the Credit Card Act of 2009 has been a strong success for consumers, saving us billions in late and penalty fees as it prevents unfair rate hikes and other deceptive practices. You can see Pew’s findings and report here: http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Credit_Cards/Report_Equilibrium_web.pdf Pew’s findings offer an important reminder that well-designed reforms can protect consumer interests, make markets more transparent and earn a level of public support that allows them to endure shifts in the political winds.

The Credit Card Act protects consumers by limiting when credit card companies can raise rates on existing balances, banning “unfair and deceptive” practices and requiring late fees and penalty fees to be “reasonable and proportional.” When the law passed in 2009, critics charged that credit card companies would have to raise interest rates and annual fees on cards sharply and deny credit to many consumers to make up for the limits on penalty fees the law imposed. Two years later, Pew’s data shows that the critics were wrong.

Interest rates and the percentage of cards charging an annual fee did rise slightly after the law was passed (increases that likely have as much to do with the credit crunch caused by the financial crisis of 2008-2009 as the reform bill itself). But those rate hikes were modest and the interest rates and annual fees charged by credit card companies appear to have now stabilized again.

At the same time, consumers are now paying much less in late and penalty fees as a result of the reform law. Since the Federal Reserve last year issued rules to enforce the credit card reform act that limit late fees to $25 to $35, the average amount late fees cost consumers has fallen sharply. Only 11 percent of bank credit cards now charge overlimit penalty fees (down from 23 percent in 2010 and 80 percent before the reform bill was passed in 2009).

Nick Bourke, director of Pew’s Safe Credit Cards Project, sees strong evidence of the reform bill’s success: “The Act created a new equilibrium where interest rates have flattened, penalty charges have declined and a number of practices deemed ‘unfair or deceptive’ have disappeared,” he concludes.

Sen. Mark Udall of Colorado, Rep. Carolyn Maloney of New York and other participants in the panel on the new law the Pew Center sponsored on Capitol Hill w law last week also stressed that the credit card reform bill has been such a success for consumers that even the House Republicans trying to eviscerate the Consumer Financial Protection Bureau and other important consumer reforms passed by the last two Congresses show no interest in seeking to reverse the Credit Card law.

The moral of the story, they suggested, is that once effective consumer reforms are in place, they become so popular with consumers that there is little political appetite for trying to roll them back.

That’s a lesson worth remembering as we work to get the Consumer Financial Protection Bureau off the ground and give the other important consumer reforms Congress passed between 2007 and 2010 the chance to work.

Join MCRC and Megaphone for the premiere of our film "Stealing Trust"

2011-04-28T08:17:00.000-07:00

City Paper Recommends MCRC & Megaphone film event as place to be Wednesday night!
http://weekly.citypaper.com/Events/e139216/emStealing_Trust_Marylanders_Speak_Outem

Car buyers lose out with new auto fees

2011-04-24T16:41:00.001-07:00

Read MCRC's letter in the Baltimore Sun regarding fee hikes for car buyers. http://www.baltimoresun.com/news/opinion/readersrespond/bs-ed-auto-fees-letter-20110423,0,5725788.story

Consumers Win New Protections in General Assembly

2011-04-12T19:06:00.000-07:00

As Maryland's General Assembly ended last night, it proved to be a winning year for consumers.

All of MCRC's priority bills passed as well as a number of other consumer bills that emerged during the session. MCRC worked hard to advance the eight new bills that will become law as well as to beat back several bills that would harm consumers.

Here is a quick summary of the wins, losses, and draws this session:

Consumer Wins

HB 87/SB 132 Job Applicant Fairness Act-Helps job-seekers by prohibiting employers from using credit scores as part of their hiring process unless there is a bona fide reason
HB 128/SB 75-Expands Maryland's Consumer Protection Act to include merchants who promise to buy consumers home or cars. If a merchant with this kind of business behaves in a deceptive manner, consumers will now be protected under the law.
HB362/SB236-Protects home-owners from unscrupulous home-improvement contractors by requiring the Maryland Home Improvement Commission to include stronger consumer disclosures in contracts and post complaints about contractors on the Commission's website. The bill also requires a work group to study the issue of performance bonds to see whether to require contractors to purchase performance bonds for contracts that are not fully insured by the state's Guaranty Fund.
HB 442/SB 309 -Transparency in Mandatory Arbitration-this bill provides important transparency for consumers who are bound by an arbitration agreement. The legislation requires arbitration firms and arbitrators to publish a record of their rulings for consumers to access. This allows consumers to have the same information that businesses do regarding the performance record of firms and individual arbitrators.
HB 482-Prohibits merchants from publishing a consumer's full debit card number on a receipt. Merchants have already been prohibited from publishing credit card information on a receipt. This measure will protect privacy and protect consumers from identity theft.
HB 728-Foreclosure Mediation-Expands the amount of time that home-owners facing foreclosure have to opt-in to Maryland's foreclosure mediation program from 15-30 days. This program enables distressed home-owners to meet face-to-face with servicers to try to work out a modification. The legislation also provides more consumer education to home-owners to let them know help is available.
HB 1022/SB741 Debt Settlement-Extends the FTC's advance fee ban to include intrastate, Internet, and other transactions; requires firms to register with the Commissioner of Financial Regulation; and requires firms to report upon their performance record. In three years, regulators will assess the data from the industry and recommend additional consumer protections and fees for the industry.
HB 1134-Requires moving companies to provide customers with a written estimate. The final cost may not exceed the estimate by more than 25 percent.

In addition, advocates were able to defeat some bills that would have harmed consumers. One bill would have opened Maryland up to table-funding which is strongly correlated with sub-prime lending. Another would have charged consumers interest on pre-need burial companies.

Setbacks

A strong bill that would have protected the rights of consumers and workers to join class action suits failed late last night in the Senate. Employees and consumers often waive that right which is frequently embedded in consumer and employment contracts. Industry fought hard to continue to deny this right to consumers and workers.

Thanks

Many thanks to the legislators who sponsored these consumer protection bills including Delegates Reznik, Jameson, Rosenberg, Frick, Niemann, Vaughn, Hucker, and Simmons as well as Senators Kelley and Pugh. Delegates Bobo and Lafferty offered strong support to consumers through their work on amendments and on the House floor, while Senators Frosh, Raskin, and Ferguson did their best to protect consumers in the Senate.

Commissioner Mark Kaufman, Deputy Commissioner Anne Norton, and Steve Sakamoto-Wengel from the Attorney General's office worked throughout the Session to ensure that strong consumer regulations were protected and new consumer protections were passed.

Many thanks to everyone who emailed or called their legislators. It made a huge difference and the results speak for themselves.

End of Session -Three Consumer Bills Still Need Support

2011-04-10T12:45:00.000-07:00

Monday, April 11th is the last day of the Maryland General Assembly's session. Many important consumer bills that MCRC has fought for this year are on track to pass and become law. However, the fate of several strong consumer bills will be decided between 8:00 am and midnight on Monday.

Please call your Senators and Delegates to Urge Support of the Following Bills. Your calls and emails may make the difference between passage and failure.

The three pieces of legislation that remain uncertain are:

House Bill 728-Foreclosure Mediation. The bill will improve Governor O'Malley's innovative mediation program which allows homeowners facing foreclosure to meet with servicers to try to work out a loan modification or some other positive outcome. The bill will make the materials homeowners receive more accessible and easily understood and will increase the time homeowners have to opt-in to the program from 15-30 days. This expanded opt-in time is important because many home-owners need assistance preparing their documents for the mediation and this provides them time to do it themselves or make an appointment with a housing counselor who can assist them. The bill passed out of Senate Judicial Proceedings on Saturday. It must be voted on by the entire Senate tomorrow.
House Bill 729-Class Action Waiver Unenforceability. This bill will protect consumers' and workers' right to join a class action lawsuit. Many consumer and employment contracts now contain a class action waiver which prohibits an individual from joining a class action lawsuit before dispute even arises. This prohibition limits an individual's ability to unite with other people who've had the same experience to seek justice. HB 729 passed out of Senate Judicial Proceedings on Saturday. It must be voted on by the entire Senate tomorrow.
House Bill 1022-Debt Settlement. The House version of the debt settlement bill extends the FTC advance fee ban to other types of transactions and requires debt settlement companies to register with the Commissioner of Financial Regulation and to report upon their performance. After collecting three years of data, the Commissioner of Financial Regulation and Consumer Protection Division of the Attorney General's Office will make recommendations regarding licensing and fee caps. HB 1022 must be voted on by the Senate and House tomorrow.

Improved Debt Settlement Bill Passes Out of Senate Finance-Call Senators TODAY

2011-04-07T15:16:00.000-07:00

The Senate Finance Committee, responding to consumer advocates concerns, has passed an amended debt settlement bill out of Senate Finance. House bill 1022 retains important consumer protection provisions-it expands the scope of the federal rule prohibiting debt settlement firms from collecting upfront fees to include interstate, intrastate, internet, and face-to-face meetings. The bill also clarifies when the lawyers who settle debts will be regulated. Finally, the bill requires debt settlement firms to register with the Commissioner of Financial Regulation and to report annually on their performance.

In 2013, the Commissioner on Financial Regulation and the Consumer Protection Division of the Attorney General's office will offer recommendations on licensing and fee caps.

Although MCRC would clearly prefer a bill that sets reasonable fee caps on debt settlement firms, we did not want to codify the debt enrolled fee structure in earlier versions of the bill which contained such high fee caps that the fees could wipe out any consumer savings. This bill expands consumer protection and will allow regulators to work with consumer advocates and the industry to set appropriate caps based on data. We support this bill.

The bill will be voted on by the full Senate tomorrow (Friday)!

PLEASE CALL YOUR SENATORS AND URGE THEM TO PASS HB 1022. Find your senator's contact information here: http://mlis.state.md.us/

Call or email Members of the Economic Matters Committee and urge them to support HB 1022

Dereck Davis dereck.davis@house.state.md.us 410-841-3519
David Rudolph david.rudolph@house.state.md.us 410-841-3444
Charles Barkley charles.barkley@house.state.md.us 410-841-3001
Ben Barnes ben.barnes@house.state.md.us 410-841-3046
Aisha Braveboy aisha.braveboy@house.state.md.us 410-841-3707
Emmett Burns emmett.burns@house.state.md.us 410-841-3352
Brian Feldman brian.feldman@house.state.md.us 410-841-3186
Jeanne Haddaway-Ricio jeannie.haddaway@house.state.md.us 410-841-3429
Hattie Harrison hattie.harrison@house.state.md.us 410-841-3486
Stephen Hershey steve.hershey@house.state.md.us 410-841-3543
Tom Hucker tom.hucker@house.state.md.us 410-841-3474
Richard Impallaria rick.impallaria@house.state.md.us 410-841-3334
Sally Jameson sally.jameson@house.state.md.us 410-841-3337
Benjamin Kramer benjamin.kramer@house.state.md.us 410-841-3485
Mary Ann Love maryann.love@house.state.md.us 410-841-3511
Brian McHale brian.mchale@house.state.md.us 410-841-3319
Warren E. Miller warren.miller@house.state.md.us 410-841-3582
Joseph Minnick joseph.minnick@house.state.md.us 410-841-3332
John Olszewski john.olszewski@house.state.md.us 410-841-3458
Steven Shuh steve.shuh@house.state.md.us 410-841-3206
Kelly Schulz kelly.schulz@house.state.md.us 410-841-3080
Donna Stifler donna.stifler@house.state.md.us 410-841-3278
Michael Vaughn michael.vaughn@house.state.md.us 410-841-3691

Take MCRC's supporter survey-send it in by April 12th

2011-04-04T14:49:00.000-07:00

MCRC is planning our work for the next three years. We want to hear from you. All feedback will be taken into account by our staff and board as we plan how we can best advance consumer protection and education in Maryland.

Take five minutes and let us know your thoughts. Go to this link: http://www.surveymonkey.com/s/PWZ2WQ5 to fill out the survey.

Importance of class action lawsuits

2011-04-01T14:33:00.000-07:00

Great article in Slate about the Wal-Mart discrimination lawsuit. Class action lawsuits are an important vehicle for individual workers to band together to achieve justice. Currently, some employment and consumer contracts ask individuals to waive their right to participate in a class action case. In the Maryland General Assembly, House Bill 729 would make sure that individuals still have the right to participate in class actions. The bill passed the House and was just heard in the Senate Judicial Proceedings Committee. Call your Senators and ask them to support HB 729! And keep following the Wal-Mart case.
http://www.slate.com/id/2289354

Debt settlement bill in the General Assembly offers high fees, few protections

2011-03-31T07:55:00.000-07:00

Read MCRC's Executive Director's op-ed in the Baltimore Sun about the debt settlement legislation pending in the Maryland General Assembly. Call your delegate and senator and ask them to oppose SB 741/HB 1022. Let us know if you contact them as well as any response you receive.

http://www.baltimoresun.com/news/opinion/oped/bs-ed-debt-settlement-20110330,0,6025960.story

Consumers win victories on home improvement, employment rights, extending consumer protections

2011-03-30T19:00:00.000-07:00

With less than two weeks left in the legislative session, consumers are winning important victories on a number of important issues in Annapolis and many of the legislative goals we’ve been working for look like they’re on track for success.

Both the House and the Senate have now passed legislation that promises to give homeowners better protection and better information when they renovate their homes. The bills to renew the Maryland Home Improvement Commission passed in each chamber (SB 236 and HB 362) would require the MHIC to provide consumers much more information about their rights in home improvement projects and establish a searchable database that will make it much easier for consumers to find the complaints lodged against contractors. The Senate’s bill also promises to study the use of performance bonds to give homeowners much better insurance against the damages they might incur in expensive renovation projects than the state’s Guaranty Fund now provides, a reform we’ve long supported, and we’re hopeful that such a study will be part of the final bill.

We’re also very pleased that both houses have passed bills that would ban the use of credit checks in most employment decisions. This legislation (SB132/HB87) will prevent many Marylanders from being denied a job as a result of credit woes unrelated to their job performance or employment record. That’s a big victory for many jobseekers struggling to find work during tough times that fulfills one of the Consumer Caucus’ most important goals.

The House and the Senate have also now approved bills that would extend the Consumer Protection Act to cover transactions in which merchants buy commodities like gold, cars and homes from consumers (SB 75/HB128). That legislation would close a loophole in our consumer protection law and give new protection to the cash-strapped Marylanders who need to sell such goods.

We’re also very glad that a House Bill that threatened to encourage predatory lending by allowing mortgage brokers to take new finder’s fees for originating loans has now been withdrawn. That bill (HB 1323) would have weakened the Finder’s Fee Act, one of our state’s most important consumer protections, and allowed brokers to take new fees out of the pockets of homebuyers.

Bad Debt Settlement Bill Passes Senate Second Reader -Call NOW to Oppose

2011-03-25T10:43:00.000-07:00

The Senate passed SB 741 on second reader. The bill would regulate debt settlement firms in Maryland (SB 741) but as amended, the bill provides virtually no consumer protections. Senate Bill 741 was intended to cap fees for debt settlement companies and regulate the industry in Maryland to provide much stronger protections for financially distressed consumers who turn to debt settlement companies for relief. The original bill called for debt settlement firms to collect no more than 30 percent of what they save consumers in fees. This “savings” model provides incentives for the settlement firms to settle debts quickly and efficiently, because companies are paid only when the debt is settled and on the basis of how much they save consumers.

The Senate Finance Committee passed out a bill based on industry concerns which instead caps fees at 25% of the total debt a consumer enrolls with a settlement firm. This cap would result in much higher fees for consumers that would likely erase any savings consumers might realize. This fee is higher than any limit proposed by the industry. This model also provides perverse incentives -- it rewards debt settlement firms for talking consumers into enrolling their debts, whether or not they succeed in settling those debts.

CALL YOUR SENATOR NOW AND ASK HIM OR HER TO OPPOSE SB 741. To contact or find your Senator go here:http://mlis.state.md.us/

BACKGROUND

Debt settlement companies have grown in tandem with rising consumer debt as working families have struggled to make ends meet amid stagnant wages and rising costs for health care, education and housing. Debt settlement firms promise to settle consumers’ debts by having consumers save enough money in a separate account to make a “lump sum” settlement with a creditor. They often encourage consumers to quit paying their debts while they pay into that separate account. Many consumers have then found that the settlement firms have NOT reduced their debts and have had to face collection activity and bankruptcy after paying fees to a debt settlement firm. New federal regulations mean that a debt settlement firm cannot charge a consumer fees until a debt is settled. Legislation introduced this year in Maryland (HB 1022/SB 741) would cap these fees for consumers but as the Senate bill now stands it would permit fees so high that it would do little to protect consumers.

To read our debt settlement policy brief: http://www.marylandconsumers.org/Resources/MCRCreports/tabid/72/Default.aspx
To watch Marylanders stories about debt settlement: http://www.youtube.com/user/MDConsumerRights

Home Improvement Bill Moving Forward-Save Homeowners from Losing Money to faulty contractors

2011-03-21T12:06:00.000-07:00

Eileen Ambrose’s fine article in the Sunday Sun told the story of one of the many Maryland families who have been victimized by abusive home contractors and offered some good advice about how homeowners can protect themselves when they remodel their homes. Here’s the link: http://www.baltimoresun.com/business/money/bs-bz-ambrose-home-improvement-20110320,0,3093001.story

Including much stronger consumer protection in the legislation to renew the Maryland Home Improvement Commission will help protect all Marylanders from that kind of abuse. That’s why MCRC is working to ensure the legislation requires home improvement contractors to disclose the rights of consumers more clearly, creates a reliable database for consumer complaints against contractors and provides better insurance for homeowners.

Today the MHIC’s Guaranty Fund offers some insurance to homeowners whose renovation projects cost less than $20,000 but offers little protection to those doing more costly renovations. We’re calling for the state to require contractors to provide a performance bond that would guarantee the work on projects costing more than $25,000. Such bonds would add just .5% to 2% to the cost of the job and contractors would be free to add that cost to their fees. That’s a simple an inexpensive way to protect homeowners with expensive projects from the high costs of shoddy or incomplete work.

The law should also require MHIC to establish a searchable database that lists licensed contractors and the complaints lodged against them. The Maryland Board of Physicians has set up such a database that clearly lists complaints against state physicians and establishing such a system for contractors would make it much easier for homeowners to make well-informed renovation choices.

Please let your state senators and delegates know that you want these reforms to be part of the MHIC bill (HB 362/SB236). Members of the Senate Education, Health and Environment Committee and the House Business Regulation Subcommittee are particularly important to the process. Delegates on that subcommittee include

Michael L. Vaughn, chair 301.858.3691, michael.vaughn@house.state.md.us

Aisha Braveboy, 301.858.3707, aisha.braveboy@house.state.md.us

Emmett C. Burns, Jr. 410.841.3352, Emmett.burns@house.state.md.us

Jeannie Haddaway-Riccio 410.841.3429, Jeannie.haddaway@house.state.md.us

Benjamin F. Kramer 301.858.3485, Benjamin.kramer@house.state.md.us

Joseph J. Minnick 410.841.3332, Joseph.Minnick@house.state.md.us

David D. Rudolph 410.841.3444 David.Rudolph@house.state.md.us

Steven Schuh 410.841.3206 Steve.schuh@house.state.md.us

Kelly Schulz 410-841-3080, Kelly.Schulz@house.state.md.us

Contact information for members of the Senate EHE Committee is listed below in the March 15 entry.

Senate Bill on Home Improvement Voted on March 17 or 18

2011-03-15T21:32:00.000-07:00

Maryland home-owners have banded together after being defrauded by a licensed home-improvement contractor. Now, they are using their experiences to try to pass legislation to protect other home-owners who embark on home-improvement projects. MCRC has been working with this group since last June. MCRC and the home-owners group are calling for:

stronger consumer disclosures in home-improvement contracts
listing complaints and actions against home-improvement contractors on the Maryland Home Improvement Commission's website
requiring contractors who take on home improvement projects above $25K to purchase a performance bond (currently home-owners are protected by the Maryland Guaranty Fund up to $20K)

The Senate Education, Health, and Environmental Affairs (EHE) Committee is scheduled to vote on the bill this Thursday or Friday. Call or email senators on the committee and ask them to protect home-owners by passing SB 236 with MCRC's amendments.

Senators on EHE include:

Joan Carter Conway, Chair joan.carter.conway@senate.state.md.us 410-841-3145
Roy Dyson, Vice Chair roy.dyson@senate.state.md.us 410-841-3673
Joanne Benson, joanne.benson@senate.state.md.us 410-841-3148
Bill Ferguson bill.ferguson@senate.state.md.us 410-841-3600
J.B. Jennings jb.jennings@senate.state.md.us 410-841-3706
Karen Montgomery karen.montgomery@senate.state.md.us karen.montgomery@senate.state.md.us
Paul Pinsky paul.pinsky@senate.state.md.us, 410-841-3155
Edward Reilly edward.reilly@senate.state.md.us, 410-841-3568
James Rosapepe jim.rosapepe@senate.state.md.us 410-841-3141
Bryan Simonaire bryan.simonaire@senate.state.md.us 410-841-3658
Ronald Young ronald.young@senate.state.md.us 410-841-3575

The Howard County Office of Consumer Affairs, the Montgomery County Office of Consumer Protection, the Consumer Protection Division of the Attorney General's Office are also supportive of these amendments.

Check out our YouTube channel to hear some of the home-owners stories. http://www.youtube.com/user/MDConsumerRights

Senate Debt Settlement Working Group TODAY

2011-03-14T09:04:00.000-07:00

Today, MCRC joins a Senate work group meeting on debt settlement-Senate Bill 741. MCRC is advocating for a 15% fee cap on the amount firms can charge cash-strapped consumers. Between April-December 2010, the Attorney General's office received 88 new complaints from Marylanders who had lost $112,000 to unscrupulous debt settlement firms. Of these 88 complaints, 64% of victims were women and many were retired or nearing retirement age.

Currently, the legislation calls for a 30% fee cap. MCRC believes this fee is far to high. Individuals turn to debt settlement companies when they have nowhere else to turn. Recent research from the Center for Responsible Lending shows that fees need to be set below 20% for a consumer to break even IF the majority of their debts are settled. While debt settlement firms need to generate profits, testimony and reports from The Association of Settlement Companies (TASC) and Debt Shield state that many of these costs are in acquiring customers. MCRC believes these costs could be reduced without diminishing their services. TASC is asking that fees are not capped at all and that each debt settlement firm can determine its own fees.

If you think fees should be lower, call or email your Senator today. Ask them to amend the bill to cap fees at 15%. Email marceline@marylandconsumers.org for more information.

Debt Settlement -one story-bill hearing today

2011-03-01T07:45:00.000-08:00

Listen to this story on debt settlement, which is part of MCRC's upcoming film "Stealing Trust: Marylanders Speak Out on Frauds, Scams, and Financial Abuses."

Debt settlement firms claim they will cut consumers's debt in half. Yet, to date, the majority have collected up-front fees and failed to deliver on their promises-leaving consumers with poorer credit scores, higher debt, and less money in their bank accounts.

Today, the Senate Finance Committee is hearing legislation to regulate debt settlement firms in Maryland. The House Economic Matters Committee will hear the legislation on Thursday.

MCRC supports regulating the industry but feels the 3o% cap on fees is too high! Maryland families struggling to pay their bills need to keep more money in their pockets. We support a 15% cap on fees, strong disclosures, and reporting requirements. For more information check out MCRC's two reports on the issue at www.marylandconsumers.org

Call your Senators to tell them you support a 15% cap on fees for SB 741.

Comments on Cramming

2011-02-24T07:20:00.000-08:00

The FTC will hold a workshop on cramming-when unauthorized third-party charges appear on a consumer's phone bill, on May 11th. The FTC is collecting comments on this issue as well. You can find out more by going to their website at: http://www.ftc.gov/opa/2011/01/cramming.shtm

Obama seeks multibillion dollar settlement of loan servicing cases

2011-02-24T06:37:00.000-08:00

The fact that struggling home-owners have faced challenges securing loan modifications, avoiding foreclosures, or even speaking with someone who could offer real assistance is not news. Last fall, allegations that bank employees signed off on foreclosure documents without reviewing the facts in the cases echoed concerns that consumer advocates had voiced for several years. Examinations of the "robo-signing" issue revealed other weaknesses in the document and foreclosure processes which had again already been raised by consumer advocates. Now, the federal government is pushing for banks to agree to a meaningful settlement.

In Maryland, Senator Brian Frosh has introduced several bills which address the problems with "robo-signers" and defects in the current document foreclosure process. Delegate Doyle Niemann is introducing legislation in March to make Maryland's innovative foreclosure-mediation program more consumer-friendly. MCRC is supporting these efforts.

Read about the national settlement proposal below from today's Wall Street Journal:

U.S. Pushes Mortgage Deal

Obama Proposal Seeks Multibillion-Dollar Settlement of Loan-Servicing Cases

By NICK TIMIRAOS, DAN FITZPATRICK and RUTH SIMON

The Obama administration is trying to push through a settlement over mortgage-servicing breakdowns that could force America's largest banks to pay for reductions in loan principal worth billions of dollars.

Terms of the administration's proposal include a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth, people familiar with the matter said. The cost of those writedowns won't be borne by investors who purchased mortgage-backed securities, these people said.

If a unified settlement can be reached, some state attorneys general and federal agencies are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers, these people said.

But forging a comprehensive settlement may be difficult. A deal would have to win approval from federal regulators and state attorneys general, as well as some of the nation's largest mortgage servicers, including Bank of America Corp., Wells Fargo & Co, and J.P. Morgan Chase & Co. Those banks declined to comment.

A settlement could help lift a cloud of uncertainty that has stalled the foreclosure process since last fall. Economists have warned that foreclosures need to proceed for the housing market to continue on a path to recovery. It's unclear how many borrowers would benefit from a deal. Servicers have thus far had difficulty managing the volume of troubled loans.

So far, most loan modifications have focused on shrinking monthly payments by lowering interest rates and extending loan terms. Banks, as well as mortgage giants Fannie Mae and Freddie Mac, have been shy to embrace principal reductions, in part due to concerns that many borrowers who can afford their loans will stop paying in the hope of being rewarded with a smaller loan. But some economists warn that rising numbers of underwater borrowers will drag on housing markets and the economy for years unless more is done to help them.

The settlement terms remain fluid, people familiar with the matter cautioned, and haven't been presented to banks. Exact dollar amounts haven't been agreed on by U.S. regulators and state attorneys general. Regulators are looking at up to 14 servicers that could be a party to the settlement.

The deal wouldn't create any new government programs to reduce principal. Instead, it would allow banks to devise their own modifications or use existing government programs, people familiar with the matter said. Banks would also have to reduce second-lien mortgages when first mortgages are modified.

Several federal agencies have been scrutinizing the nation's largest banks over breakdowns in foreclosure procedures that erupted last fall. Last week, the Office of the Comptroller of the Currency said only a small number of borrowers had been improperly foreclosed upon. But the regulator raised concerns over inadequate staffing and weak controls over certain foreclosure processes.

A settlement must satisfy an unwieldy mix of authorities, including state attorneys general and regulators such as the newly formed Bureau of Consumer Financial Protection, who support heftier fines. They must also appease banking regulators, such as the OCC, that are concerned penalties could be too stiff.

"Nothing has been finalized among the states, and it's our understanding that the federal agencies we are in discussions with have not finalized their positions," said a spokesman for Iowa Attorney General Tom Miller, who is spearheading a 50-state investigation of mortgage-servicing practices.

Last autumn, units of the nation's largest banks were forced to suspend foreclosures amid allegations that bank employees routinely signed off on foreclosure documents without personally reviewing case details. In subsequent examinations, federal bank regulators said they found deficiencies and shortcomings in document procedures and other violations of state law.

At issue now is a debate over who has been harmed by improper foreclosure practices, and how much. The OCC's examination concluded only a "small number" of borrowers were improperly foreclosed upon, and banks have argued that any settlement should reflect that fact. Other federal agencies and state officials say banks exacerbated the woes of troubled borrowers by resisting the necessary investments in staff and technology to provide timely, effective help.

Under the administration's proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses, by writing down loans that they service on behalf of clients. Those clients include mortgage-finance giants Fannie Mae and Freddie Mac, as well as investors in loans that were securitized by Wall Street firms.

Bank executives say principal cuts don't necessarily improve payment patterns, and have told other parties involved in the talks that principal reductions could raise new complications. First, it will be difficult to determine who gets reductions and who doesn't. And even if banks agree to a $20 billion penalty, the number of mortgages that can be cured with that number is limited, one of these people said.

If a single settlement can't be reached, different federal agencies could seek smaller penalties through regular enforcement channels, and banks could face the prospect of separate civil actions from state attorneys general.

Any settlement could be one of the largest to hit the mortgage industry. In 2008, Bank of America agreed to a settlement valued at more than $8.6 billion related to alleged predatory lending practices by Countrywide Finance Corp., which it acquired that year.

—Robin Sidel contributed to this article.

http://online.wsj.com/public/page/news-business-us.html

Things we protect and things we don't

2011-02-21T18:02:00.000-08:00

Here are some things we protect with performance bonds in Maryland:

Sewage sludge removal;
Hazardous waste removal;
State construction projects;
New home construction;

And here are some things we don't protect:

Home-improvement projects that cost more than $20,000

What's wrong with this picture?

I live in a historic neighborhood in Baltimore City, MD. I love the tree-lined streets, the old, stately homes, and the 'character' found in the plasterwork, wood floors, and details. Yet, this character can be pricey to maintain or to imitate through careful home improvements designed to restore a home to its former glory.

As a former Sierra Club staff member, I know that small changes add up in terms of energy conservation. I do what I can to respect the earth and conserve energy. Yet, environmentally sustainable home-improvement projects are often more expensive in the short-run.

Shouldn't home-owners who choose to stay in cities or embark on green renovations be protected as well as those home-owners who have smaller jobs (who are protected under Maryland's Guaranty Fund)? Shouldn't they be protected in the same way that those who build new homes are? Shouldn't they be protected in the same way that state construction projects are?

If you agree, let your legislator know.

Tomorrow, the House Economic Matters committee will be hearing MCRC's proposals to require contractors to purchase performance bonds for larger jobs; publish the name and license number of contractors so home-owners can make informed decisions, and include stronger consumer protections and disclosures in contracts.

Call or email your legislators and ask them to support HB 362 with amendments.