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Consumer Protection for Credit Holders
WASHINGTON -- The ranking member of the House Financial Services
Committee has introduced a package of 11 bills that represent a
wish list for consumer advocates.
The measures, all aimed at protecting consumers from a variety
of predatory practices ranging from abusive lending to pay day loans,
are a response to changing conditions and new deceptions in the
financial service sector, according to Rep. John LaFalce, D-N.Y.
"The
growing complexity of today's financial marketplace, by itself,
should prompt Congress to consider additional measures to protect
consumers," the influential solon said. "But trends toward
market segregation and predatory ethics now demand that consumers
have additional rights against unfair and abusive practices."
The 11 bills, some of which were offered into the legislative hopper
by Rep. LaFalce during the last session of Congress, seek to address
what he and other sponsors believe are the worst and most widespread
offenses and practices confronting unsuspecting consumers in the
market for credit and basic services.
The
measures "respond to the growing numbers of people who fall
victim to predatory practices," said Margot Saunders of the
National Consumer Law Center, who praised the New York legislator
for "answering the moral call" to end the trend.
Frank
Torres of Consumers Union said the combined bills set "the
benchmark for offering relief" to consumers. "These legislative
initiatives represent a consumer wish list and Congress should seriously
consider adopting them," Torres said.
Rep.
LaFalce's Consumer "Bill of Rights" package includes the
following:
Predatory Lending Consumer Protection Act
-- Expands protections in current law against abuses in high-cost
mortgage refinancing and second mortgages to prevent flipping and
equity stripping, enhances disclosure requirements, strengthens
civil enforcement, and prohibits single premium life insurance,
prepayment penalties and excessive fees.
Consumer Credit Card Protection Act --
Expands Truth in Lending Act ("TILA") protections regarding
credit cards to require the disclosure of interest rates and fees
and even greater disclosure in Internet solicitations, and restrict
excessive fees, other penalties and solicitations to minors.
Equal Credit Enhancement and Neighborhood
Protection Act -- Expands federal fair lending protections to
combat racial steering and reverse redlining practices in the subprime
credit sector, and requires greater reporting by lenders on credit
availability and cost in poor and minority neighborhoods.
Truth in Lending Modernization Act --
Expands TILA to cover larger, unsecured credit and lease transactions,
preserves civil liability penalties and recession rights, changes
accounting for consumer rebates and increases punishments for violations.
Payday Loan Consumer Protection Amendments
-- Prohibits federally regulated institutions from participating
in payday lending, bans the use of instruments drawn on federally-insured
accounts as collateral, and applies TILA credit disclosure protections
to payday loans.
Consumer Automobile Lease Advertising Improvement
Act -- Amends current law to provide clearer standards for disclosing
leasing terms and costs and requires dealers to provide written
information of key lease terms to allow consumers to make accurate
cost comparisons.
Truth in Savings Act Enhancement Amendments
-- Restores expiring civil remedies available to consumers to prevent
false and misleading practices involving the terms and costs of
savings accounts and increase penalties for violations.
Unsolicited Loan Check Consumer Protection
Act -- Prohibits the use of negotiable instruments known as
"live checks" in credit solicitations, limits consumer
liability for unsolicited checks and authorizes federal guidelines
to limit the use of check-like features in credit offers.
Consumer Affordable Transaction Account Act
-- Requires all insured institutions to advertise and provide consumers
with low-cost transaction accounts that allow a minimum number of
checks or withdrawals per month with reasonable fees.
Credit Card Predatory Practices Prevention
Act -- Expands TILA protections to prohibit false and deceptive
subprime credit card solicitations and bans practices intended to
generate penalties and fees or prevent the cancellation of such
accounts.
Consumer Banking Services Cost Assessment
Act -- Continues the Federal Reserve's annual reporting requirements
on consumer banking fees, and expands the reports to include credit
unions fees and charges associated with credit cards and other banking
services.
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