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Predatory Lending Against Our Military?

August 23, 2015

By Allen A. Kolber, Esq.

In my last article I discussed the continuing predatory lending practices by the mortgage and credit card industry by continuing to add fraudulent charges or unnecessary services.

The government has finally taken action against high cost lenders who prey upon active duty service members and their families by offering so-called "Payday Loans" (a loan against their next paycheck), "Refund Anticipation Loans" (loans secured against tax refunds), and "Auto Title Loans" (a loan secured by the family's vehicle). Additionally, high cost lenders who typically set up shop outside the gates of military bases across the nation sneak in charges for "add on products" such as credit default insurance or credit monitoring services. Such loans, including the add-on products, can equal close to 100% interest (although the credit card and banking industry have continued to persuade Congress to not designate these loans as usury - 26% interest in New York State).

Restrictions on high cost loans to soldiers and sailors were enacted in the Military Lending Act of 2006, which banned annual percentage rates greater than 36%. However, the banking industry was able to avoid the interest rate cap by devising different mathematical formulas to calculate a loan's annual percentage rate.

In the last two months, Bank of America and JPMorgan Chase have each been assessed $30 million in civil penalties for violating the Service Member Civil Relief Act which provides consumer protection to service members who are on duty overseas.

It continues to disturb me that so many of my family clients in financial crisis feel that filing for bankruptcy protection against the largest banks and credit card lenders is somehow morally wrong. I continue to stress that there are no moral or ethical issues in filing a Bankruptcy case, just as there were no moral or ethical issues contained in the contract you entered into with these lenders. Consumers must learn to utilize the Bankruptcy and Consumer Protection laws in the same manner that the largest financial institutions use the law to their own economic advantage.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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