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| The
Fight against Predatory Lending |
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| Editorial
by Doug Bloch, ACORN |
Here in the Seattle area and all across the
country, ACORN is waging an aggressive campaign
against predatory lending. ACORN has a long
history of fighting for fair access to credit
and pushing banks to make loans in our communities.
A recent ACORN study found that one in three
African-American applicants and one in four
Latino applicants for conventional loans were
denied in 1999, compared to just one in eight
white applicants. Over the past few years,
we have seen lenders with high rates and fees
fill the gap when regular banks do not make
enough good loans.
ACORN is a grassroots organization of people
in low- and moderate-income neighborhoods
who fight for fair and affordable housing,
better schools, better city services, and
living-wage jobs. We keep hearing more and
more stories from people in our neighborhoods
getting ripped off.
Families are being promised one thing, and
finding their payments are hundreds of dollars
a month higher; people with good credit are
being charged 13 or 14 percent for a loan,
or even more; high fees and expensive and
unnecessary products like single premium credit
insurance are being added on to loans; people
are being refinanced again and again, with
more fees added each time; prepayment penalties
trap people in loans they can't afford, or
cost them thousands of dollars extra to find
a fair deal. The list goes on. Too many people
are losing their homes, and others are managing
to hold on to them at a terrible cost.
ACORN is taking this problem on in many ways.
We are out in our communities organizing people
who are getting predatory loans. We are doing
direct actions against individual lenders
to make them loan fairly, including recent
actions at the offices of the Associates and
Household Finance Corporation. We are pointing
regulators at the worst abusers, and we are
working on legislation at every level. Earlier
this month, 10 ACORN members traveled to Olympia
to demand legislation before a Senate committee
hearing on predatory lending.
We need improved laws covering many more lenders
that protect consumers against unfair practices.
Some abusive loan terms and features just
shouldn't be allowed. As a result of our meetings,
the state Department of Financial Institutions
will propose revisions to RCW 31.04, which
licenses and regulates consumer loan companies.
As we change the laws, we also need to make
sure that people in our neighborhoods are
getting the information they need to protect
themselves, to find better alternatives, and
to sniff out a loan offer that's out to milk
them. We need real grassroots community organizing,
education, and counseling.
Washington ACORN reopened in December 1999,
and now includes over 350 member families
in the Rainier Valley, White Center, Kent,
and throughout South King County. This year,
ACORN members have done direct actions to
win repairs from slumlords. For more information,
contact ACORN at (206)723-5845 or go to the
website (www.acorn.org). |
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