SDNY Denies “Sewer Service” Lawsuit Motion to Dismiss

Second Circuit Judge Denny Chin, sitting by designation, denied a motion to dismiss in a suit alleging a massive “sewer service” scheme by a debt-buying company, a law firm engaged in debt-collection litigation, and a process server. According to the NY Times on 1/4/11, the lawsuit charged a scheme to fraudulently obtain more than 100,000 default judgments in state court.  The scheme allegedly involved the intentional failure to serve a summons and complaint, “followed by the... 

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NYT’s Editorial on “Debit Card Predators”

The New York Times thinks that Congress made a huge mistake last year when it imposed new regulations on banks for credit card disclosures, but failed to create regs for debit cards.  Although banks are required to give customers an opt-in choice before overdrawing a debit card, and charging huge fees, many banks have made this information confusing at best, and misleading at worst.  “As a result,” states an editorial on 1/20/11, “low-income debit card holders are still being... 

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NEDAP Testifies Against Prepaid Debit Cards

The Neighborhood Economic Development Advocacy Project (NEDAP) recently gave testimony to the NYC Council Consumer Affairs Committee about the predatory effect of prepaid debit cards on low income households. NEDAP identified specific problems with prepaid debit cards, including high and hidden fees, weak consumer protections, litttle or no FDIC protection, minimal positive impact on credit histories, and the use of the cards to extend payday loans (which are illegal in New York). Recommendations... 

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Interfaith Effort to Cap Usury Rates

A broad-based national interfaith movement is afoot to cap interest rates at 10%. Founded on community organizing principles and a commitment to a rational cap on interest rates, the group’s efforts are known as “10% is Enough.”    Send article as PDF     Read More →

CFPB Enforcement Head Named

Bloomberg News recently reported that Ohio’s former Attorney General has been named to head enforcement of the new Consumer Financial Protection Bureau.  You can read about it here    Send article as PDF     Read More →