AFFIL'S Six Principles of Fairness in Lending

 

RESPONSIBILITY:

Lenders must gauge ability to repay and offer borrowers the most affordable and well-suited products for which they qualify. Lenders should demonstrate commitment to the building of personal assets.

 

JUSTICE:

All participants in the making, collecting, holding and buying of debt have a duty to deal fairly with the borrower. It is unjust to prey upon anyone, particularly on those who are vulnerable due to age, health, language, education or other socioeconomic circumstances. It is unjust to charge exorbitant interest rates and fees, to change terms once agreed, and to deny anyone their day in court.

 

EQUALITY:

We all must have equal access to appropriate and fair products and services regardless of race, gender, language, national origin, physical/mental well-being, education, lifestyle or socioeconomic status. All discriminatory lending practices must be abolished.

 

INFORMATION:

We require full disclosure of all costs, fees, loan terms, penalties and collection practices in language that is clearly understood by the borrower. Although information is a necessary component to a fair marketplace, it is not a substitute for fair terms, fair treatment and effective regulation.

 

ACCOUNTABILITY:

Lenders must track and report their lending activity. Only with comprehensive reporting can we ensure that the marketplace is free from illegal and unethical practices and that consumers are safe to shop for credit products without risk of being overcharged or directed to inappropriate loans.

 

LAW & ENFORCEMENT:

Our government must establish essential consumer safeguards in the lending marketplace with laws that hold all members of the lending industry liable for activies throughout the life of the loan and its collection. There must be mechanisms for reporting abusers, and compensation for victims of lending abuse.

 

Ten Reasons Why You Should Care About Predatory Lending

1. Your lender wants you to pay late.
Did you know your credit card company can change your payment due date each month hoping you'll miss your payment? And lenders can charge that $39 late fee even if you're only an hour late.

2. You can't win.
If you have a problem with your credit card company (imagine that), you cannot sue them in court. Instead, you have to take your complaint to an "arbitrator" - who 95% of the time, will rule in favor of the credit card company.

3. Banks donate more money to politicians than the oil industry.
Clearly, they're up to something.

4. There are more Payday Loan outlets in the United States than McDonalds restaurants.
And you'll never guess where they all are: in low-income and minority neighborhoods.

5. People can't choose the careers they want.
In 2001 the average college grad with loans had $20,402 in debt, and young people are taking on higher-paying but less meaningful work because of the debt albatross.

6. Abuse is their business.
The more we pay in interest and fees, the higher their profits, so the credit card companies are always looking for excuses to add new fees or jack up interest rates on our debts.

7. All those credit card offers that come in the mail are bad for the environment.
Enough said.

8. The poor pay the most.
23% of low-income families don't have a checking account, so they rely on expensive financial services instead. Payday lending and Tax Refund Anticipation Loans alone drain $5 billion from families each year.

9. Discrimination.
Anyone smell racism in the mortgage market? If not, read the stats: over 70% of high-income African American homebuyers in Boston received a subprime mortgage in 2006. Over half of African American homebuyers and over one third of Latino homebuyers nationwide received a subprime loan in 2006, as compared to one in five white homebuyers.

10. The subprime mortgage scandal.
Over two million families who received subprime mortgages since 1998 will end up losing their homes to foreclosure. Many already have. This will cost Americans as much as $164 billion.