NationStates Jolt Archive

Greetings Honorable Delegates,

The Colony of Twin Forks respectfully requests your endorsement of our U.N. proposal, the "Anti-Predatory Lending Law." This important piece of legislation protects the rights of all citizens from abusive practices made by banks and lenders, which causes many people, especially minorities and the elderly, to be swindled into agreements that force them to give up their homes. Hopefully after you review it, you will support it and do everything in your power to see that it is brought forth for consideration and passed. The deadline for the measure to reach the necessary number of endorsements is Tuesday, November 18th.

Regards,

The Colony of Twin Forks

Anti-Predatory Lending Law

A resolution to reduce income inequality and increase basic welfare.

Category: Social Justice
Strength: Mild
Proposed by: Twin Forks

Description: Certain homeowners are at risk of losing their homes and financial security because of predatory home equity lending practices. Predatory lenders target elderly and other vulnerable consumers (often poor or uneducated) and use an array of practices to strip the equity from their homes. The abusive practices include excessive loan fees, costly and unnecessary insurance policies, large "balloon" payments, high interest rates, and frequent refinances.

While abusive practices have occurred in the past, they have become more widespread as subprime home equity lending has expanded; a director at the Federal Trade Commission recently called these abuses a "serious national problem."[12] And the absence of strong consumer protection laws and the lack of enforcement of existing laws permit these practices to flourish.

Predatory lending is particularly devastating because subprime borrowers typically seek home equity loans at a time of great financial need, when they are in the weakest bargaining position and most susceptible to practices that can strip them of substantial sums of money and, ultimately, their homes. These practices, which are described in more detail below, include the following:

Deceptive marketing
Lending without regard to a borrower's ability to repay the loan
Incomplete loan disclosure and fraud
Excessive fees and insurance
Broker yield-spread premiums
High interest rates and "balloon" payments
Loan "flipping" (frequent refinancing)
Prepayment penalties

This law would make these practices illegal. No longer can we sit idly by while the eldery and minorities are targeted by abusive lending practices. Please join me in supporting this legislation.

Approvals: 20 (Welcome to Coneria, Xaqon, The Bruce, _Myopia_, Sulon, Kahta, Qaaolchoura, Goobergunchia, Nefastus Astu, Swimmington, Butthole, Philberta, 1 Infinite Loop, Waleeds, Phuckuvia, Mikes Hope, Gearheads, Cherry Cola, Free Minds Enslaved, Daginoth)

Status: Lacking Support (requires 102 more approvals)

Voting Ends: Tue Nov 18 2003

The Liberal Unitary Republic of Goobergunchia has approved this proposal.

looks alright, doesnt really take away any powers from the banks that they should have, while taking away some of the "low blow" tactics they can use. Well written, with no major loopholes like some proposal/resolutions *cough Equality for all cough*

quite specific. Pretty good overall.

Just one thing, there is too little proactive action. Maybe the institution of education programs to make more people aware of such practices? After all forewarned is forearmed.

Rad Kom
UN Ambassador
The Fiefdom of Baron Porkonia

Greetings Honorable Delegates,

The Colony of Twin Forks respectfully requests your endorsement of our U.N. proposal, the "Anti-Predatory Lending Law." This important piece of legislation protects the rights of all citizens from abusive practices made by banks and lenders, which causes many people, especially minorities and the elderly, to be swindled into agreements that force them to give up their homes. Hopefully after you review it, you will support it and do everything in your power to see that it is brought forth for consideration and passed. The deadline for the measure to reach the necessary number of endorsements is Tuesday, November 18th.

Regards,

The Colony of Twin Forks

If I give you MY money I have the right to demand whatever the hell I want from you. You are always free to reject the offer.

*sighs* Ah the wonderful smell of verbal cordite. Here we go again....

Perhaps you did give that person money. The question is did you give them the money on equitable terms? Did they realize they were being taken advantage of? I have no problem with interest rates etc. After all, if they didn't exist there would be no incentive to pay off loans. But the predatory actions of banks is not ethical business practice.

Rad Kom
UN Ambassador
The Fiefdom of Baron Porkonia

I have reintroduced this proposal, and it should have more favorable media coverage now that it will be on the front page of the proposal list the day it expires. I again implore you all to support this very important piece of legislation, and to lobby your delegates to do so.

There should be reasonable rate ceilings imposed both for residential borrowing and consumer credit. Any lending above those rates would be punished as usury. This used to be a frequent penalty which has fallen on disfavor in these "easy credit" days.

Here is an example of abuse which is currently legal: Send an individual a check for $1,000 with his or her name on it. They cash it; it's a legal check or bank draft. They fail to notice the very fine print on this piece of paper which states that by the act of "accepting" (cashing) the check they are obliged to repay this loan (which never overtly proclaims itself to be a loan) at the annual rate of 25%.

bump... deadline for endorsement of this proposal is saturday the 29th...