Advocates Urge Crack-Down on Predatory Lenders
According to the Buffalo News, consumer advocates from around the state of New York urged state lawmakers to crack down on financial abuses targeting the poor, instead of merely relying on only financial education to protect low-income New Yorkers.
At the second of two public hearings, the advocates cited financial practices that take advantage of low-income and minority consumers in New York, such as high-cost predatory lending. The advocates also described tactics such as "one-stop" shops in which the real estate agent, broker, lender, lawyer and appraiser operate together to trap consumers in high-cost loans. The advocates relayed stories of consumers victimized by such scams, who are now fighting to save their homes.
Lawmakers say they hope to use the hearings to decide what actions to take to strengthen consumer protections. Assemblywoman Crystal Peoples from Buffalo, one of three Democratic lawmakers, said that the interests of business people have to be taken care of, but in that process, lawmakers have to make sure that consumers are not taken advantage of.
Activists said just teaching consumers what to avoid with financial education programs is not enough. Accordingly, advocates issued a range of recommendations for lawmakers such as additional state support for counseling, more capital for community development and creation of a special low-income savings account program.