Wall Street Throttles Up Battle Against Consumer Protection

“The people running this system remind me of gangsters who manage to walk out of the courthouse with a suspended sentence and can’t wait to get back to their nefarious activities.”

Today’s business model is about making money through tricks and traps.” –Elizabeth Warren Chairman of Oversight Committee
There is nothing free or fair about a market in which one side uses double talk and mumbo jumbo to obscure important information and deliberately dupe the other side into making decisions against its own interests.
July 14, 2009
Op-Ed Columnist

Chutzpah on Steroids


What is up with the banks and the rest of the financial industry? The people running this system remind me of gangsters who manage to walk out of the courthouse with a suspended sentence and can’t wait to get back to their nefarious activities.

These malefactors of great wealth (thank you, Teddy) developed hideously destructive credit policies and took insane risks that hurt millions of American families and nearly wrecked the economy. Then they were bailed out with hundreds of billions of taxpayer dollars, money that came from the very people victimized by the industry’s outlandish practices.

Now the industry is fighting against creation of an agency that would protect taxpayers and ordinary consumers from a similarly devastating onslaught in the future. And at the same time they are scrambling to raise credit card interest rates and all manner of exploitive fees to build a brand new superstructure of questionable profits on the backs of the taxpayers who came to their rescue.

We’re reaching a whole new level of chutzpah here.

The Obama administration wants to create a Consumer Financial Protection Agency that would shield individuals and families from deceptive practices and outright fraud by banks and other businesses offering credit cards, mortgages, home loans and other forms of consumer finance.

Everything we’ve learned in this recession tells us we need such an agency. As Treasury Secretary Timothy Geithner described it, “This agency will have only one mission: to protect consumers.”

Protecting the consumer is, of course, anathema to the industry. So it’s preparing for war. The Times’s Edmund Andrews neatly summed up the matter when he wrote that “banks and mortgage lenders are placing top priority on killing” the president’s proposal.

The proposed agency developed from an idea offered some time ago by Elizabeth Warren, a Harvard Law School professor who currently chairs the Congressional Oversight Panel, which has been monitoring the financial industry bailouts. She is a strong contender to lead the proposed new agency.

Ms. Warren told a Congressional committee last month about the stark difference between the warm and fuzzy advertising approach used by lenders competing for consumer dollars and the treachery that is so often hidden in the fine print.

“Giant lenders compete for business by talking about nominal interest rates, free gifts and warm feelings,” she said, “but the fine print hides the things that really rake in the cash. Today’s business model is about making money through tricks and traps.”

It should be clear by now that it is often the goal of financial institutions to see that the consumer is not well informed. “In the early-1980s,” said Professor Warren, the average credit card contract was about a page long. “Today, it is more than 30 pages. … I am a contract law professor, and I cannot make out some of the fine print.”

She added, “Study after study shows that credit products are designed in ways that obscure the meaning and trick customers.”

There is nothing free or fair about a market in which one side uses double talk and mumbo jumbo to obscure important information and deliberately dupe the other side into making decisions against its own interests.

When I think of the banking industry fighting to kill this proposed agency, it brings to mind the decades in which tobacco companies insisted that cigarettes were safe, and those days long ago when the auto companies fought against seat belts, and all the dopey arguments that were made against protecting the public from unsafe drugs and kitchen appliances that might burst into flames, and so on.

The Department of Housing and Urban Development has concluded that Americans spend approximately $55 billion each year on closing costs that they don’t fully understand. As Ms. Warren noted, “Mortgage lenders furnish reams of unreadable documents shortly before closing, often leaving people with no practical option but to take whatever terms the lender has filled in.”

The family home is the largest purchase most Americans ever make. Paying it off can take much of a lifetime. Everything about that contract should be crystal clear to the buyer.

I had a breakfast interview with Ms. Warren on a variety of subjects last week. On the day of the meeting, USA Today had a front-page article that began: “Even as regulators crack down on abusive mortgage and credit card practices, another type of lending threatens to mire consumers in a credit trap.”

The article detailed the ways in which banks are wringing huge profits from overdraft fees that often are sky high and in many cases are handled in ways that are exploitive, if not predatory.

The malefactors of great wealth view an informed consumer as Public Enemy No. 1. The last thing in the world that they want is a fair marketplace, which is why the Consumer Financial Protection Agency can’t come fast enough.

11 Responses

  1. James
    , Agreed they may be taking on too much,
    simply because they seem to forget to solidify
    and bring to a good concusion things that they start.
    Even now,How about “Consumer Protection”
    Is it a ploy:
    ADRESS the issue;then let inaction and time make it disappear,or bury it with other “more important isues”?
    I hope and pray you have read my “Everybody Wins Plan”Legislation already passed that could end the recession,save 8 to 12 million homeowners at no cost to the taxpayers and NO MONEY required!
    We can not blame congress if this message is not proven INCORRECT or not massively distributed to the public we can only blame ourselves for our inaction.
    bestsolutionsfl at aim dot com

  2. hey BASILOVECCHIO if you haven’t noticed the government is already trying to bite off way more than it should even be getting a bite of(Health Care Reform) & considering the Knock Up Job they did at regulating the mortgage industry & lending laws making consumers “safe”? I don’t think we want to have our doctor/lender/servicer/consumerprotectionagency/taxordebtcollector/authority/prosecutor,judge,jury&executioner/caretaker be all the same person/entity I’d think there might be some conflicting intrest somewhere in there

  3. Please help!
    I feel like a drowning disflexic man screaming “PLEH!
    No one understanding my call for HELP.

    INSANE?End foreclosures,short sales,makes for affordable homes Can you help me keep my sanity?
    I am ,I believe “That one poor fool” that believes he has the answer as to HOW: The Foreclosure,Subprime Mortgage,Housing and Economic Crisis can be resolved at a PROFIT to the taxpayer.
    Would you please challenge this plan?
    The HECM,Home Equity Conversion Mortgage provide by the “Housing and Economic Recovery Act of 2008 could end this recession.End all foreclosures and end housing prices declines.
    Please read on if for no other reason than to prove a plan wrong
    that states it could end ALL this grief for all AMERICANS.

    “The Everybody Wins Plan” by BASILOVECCHIO
    BASILOVECCHIO wrote: Would it be irresponsible to resolve at least the portion of the financial crisis that pertains to ALL underwater mortgages
    subprime and of course , now even those that were prime in such a manner AS TO BE PROFITABLE to the taxpayers????
    Thank you,Paul Volcker……”An outside agency”
    Robert Shiller….”properly funded”
    Dr. Yunus………..” a profittable business that does
    a social good.”
    The legality is already there.
    Funding is already there.Actually NO NEW MONEY NEEDED,This is just a government guarantee of payment.And in
    90 days or less 8 to 12 million homeowners
    would be paying their mortgages not only on time but one month in advance.
    85% want to stay and pay,the other 15% will have a waiting list of those who would
    wish to purchase their homes with the use of THIS FEDERAL APPROVED REGULATED PROGRAM.
    EVERYONE knows about the $700 billion TARP program Where the feds gave away
    $350 billion and are looking to give away the other $350 billion.
    Everyone knows about the $787 Billion Stimulus package
    to create jobs etc…..but why is it That
    IT is so difficult to get the word out on TV or internet
    that the feds passed the Economic Recovery Act Oct 2008

    This program could be the basis for 100% recovery of ALL
    defaulting mortgages,ALL and with no cost to taxpayers ,
    with A PROFIT to the taxpayer.

    YES 100% Fair Market Value”
    with A VERY LOW PAYMENT is the solution.
    Just as in the 1930’s
    A LOWER RATE OVER A LONGER TERM got people back to buying the ranches because they turned the 5 year loans into 25 year loan-
    Thank You ,Dreyfus School for the Arts and Wellington High School Debate teams for that bit of info.

    Please feel free to:
    print- edit- copy- trash-challenge or endorse

    A SOLUTION TO THE HOUSING MORTGAGE CRISIS AT NO COST to the taxpayers,rather at a profit to the taxp[ayers.
    Using today’s rates and knowledge,the entire inventory of troubled homes will become EXTREMELY AFFORDABLE and thereby
    AAA and 100% asset based.

    A special 10 year year mortgage with an automatic 30 year mortgage that includes
    TAXES and

    PER $100,000 loan there would be a total fixed 10 yr. PITI payment of
    ………$500……..PITI followed with a 30 year fixed mortgage that will
    pay the loan in full..
    Let them stay in their homes,
    Let them be able to afford it,
    and be able to manage it.
    Turn this challenge into a greater good for all.Re-establishing “CREDARE” .Faith in the American people and home values.
    This is a fast and great solution to the problem and it allows for time
    to fix the blame and to do what is nessecary for future prevention.

    We simply must get off the idea that we should only help “the good” people and leave the “reckless” ones to their own ends. Whether the foreclosed house next to me was owned by a good guy or a reckless flipper doesn’t matter.. my home value goes down either way due to the foreclosure.
    We simply have to set aside moral judgments and fix the problem.Why not at the same time create revenue for all taxpayers.
    The Housing and Economic Recovery Act allows the FHA and HUD to guarantee the FULL payment of a Mortgage untill the homeowner either sells the home or dies.The asset value of the home is the 100% security for the loan.We need only modify the conditions for this loan:
    (a) change age conditions from 62 Plus to NO AGE REQUIREMENT.
    and (b) instead of age percentage base asset required,use 100% of REAL APPRAISED VALUE.
    Problem solved: All homes become owner occupied.All housing supply will be eliminated by demand,demand by end-users.(85% that wish to stay and 15% that wish to get an AFFORDABLE home) ACTION:Solve this trillions of dollars crisis at no cost to the taxpayers,and allow for a taxpayer profit.
    RESOLVED:ALL “underwater” loans and foreclosed homes to be re- purchased (by present lender or any FDIC insured lender)at 100% of FAIR MARKET VALUE.Old Loan to be marked “paid-in-full”This is a one time deal and could be done in 6 months or less,as all that is needed is an appraisal and a closing,settlement.
    PURCHASE to be made by any lender willing to take 10 year treasury rate on note FULLY BACKED 100% by FHA,creating a 100% backed,100% asset!
    And why not?a loan on the books that would require NO reserves!

    Legislation is already in place for FHA to do this and NO NEW FUNDING IS REQUIRED.
    PAYMENT IS GUARANTEED.We need only to enhance the present HECM rules
    to allow 100% asset without any owner age resriction.Payments to be made for the ten year portion
    will be very low and for that reason perhaps 0% ,yes, 0% loss.Anyone that wishes to default will have people in line willing to pick up their payments and even give something for the right to do it.
    NEW LOAN: is a special “EVERYBODY WINS PLAN” loan
    A 10 Year loan that has fixed payments (120) with payment number 121 (the magic bullet) …… paying the balance in full.Because of the low cost of the funding(12/31/08 @ 2.08%)now @ 3% and maybe even lower because upon announcement of this solution which does not require $4 Trillion in federal borrowing.This is a special long term payback that will be a very affordable payback.
    TERMS FOR THE NEW LOAN:120 fixed, low, and affordable monthly payments that consists of……..
    ………….. (A) payment of total interest (10 yrs);
    (B)15% of principal ;
    (C)15% for taxes and insurance.
    This is a total payment ,known as P.I.T.I.
    MAGIC BULLET:Payment number 121..the new 30 year mortgage.. is given by a third party lender to the owner at a fixed prevailing rate,for the 85% balance,PLUS 5% TAXPAYER PROFIT ,then the NEW 30 year NOTE is to be 90% of what the original modified loan was.(If $4 Trillion needed that’s $200 Billion profit).
    Example:$100,000 “EVERYBODY WINS LOAN”
    LOAN AMOUNT $100,000 with payments to include:
    A…Total 10 years interest.(3%)………….. $30,000
    B…15% for principle reduction……….. .$15,000
    C..15%..TAXES and INSURANCE…..$15,000
    paid by 120 fixed equal payments of $500.00 each…… wow, how affordable is a $100,000 mortgage at a total
    payment of $500.00 per month???)
    Then the with payment number 121 the note is paid in full with a new
    30 year loan that is 90% loan to value (or less,if values increase)

    To calculate payment for 10 year portion use a factor of $5.00 per $1,000.
    Example:, if loan amount is $250,000;payments of $1250.00
    ($250 X 5.00 = TOTAL PITI FOR A HOME VALUE OF $250,000
    at an unbelievabe low $1250.00
    REPEAT: Extremely affordable.A sibling working at a minnimum wage could pay the mortgage for the entire family! It is total payment…P.I.T.I.

    Thank you,Paul Volcker……”An outside agency” THE FHA AND HUD
    Robert Shiller….”properly funded” 100% ASSET BASED GUARANTEED LOAN
    Dr. Yunus………..” a profittable business that does


    An anouncement of this plan with details could create an immediate RELIEF and “CREDARE”-CREDIT-TRUST in the AMERICAN SYSTEM.
    bestsolutions at aim dot com

  4. I think Mario was the first one t come up with the name “Banksters” now that is genius

  5. WE LOVE YOU MARIO!!!!!!!!!!!!!

  6. I post rants on my Lawyers blog, she has given me the permission to control her blog, I am not authorized to post here when I am logged into her back office, I may have done this in error a while ago. I actually forgot to log out before I posted here but I noticed that the post I submitted, did not appear, maybe that nice man back there is caring for us and I, who knows?. Its 2am and I am still up I have to work in my Legal office in the Morning at 9am. I have a lot of home work to do tonight. and I still have the reading I was given to task, which I have not yet started.

  7. Truth, you are right indeed

    It is time for a House warming tea party!!!!

    And Mario, yes you may get something out of that illegal behavior but this unethical attorney, The were harassing you, they attempted to steal your home, they stole your money, they cause mental anguish, and they broke the law. Seek out all remedies due to you and your family, make them pay!!!.

    I bid you success and keep sharing the message, you are a true hero.

    Make sure the sold out media gets your message out.

  8. Mario
    You are a modern day warrior….People don’t roll over there are impersonators trying to steal you property. Like Neil says “Challenge everything” you gotta its YOUR house, YOUR family, YOUR fight….truth and righteousness is on your side

    Do NOT go quietly into the night!!!

    RISE UP America, like Patrick Henry, Paul Revere, this is our moment when we take this country back….


  9. Jose,

    Thanks so much for your well wishes, I know that we have brought a front to the bankster that they never thought would ever happen, we did bring them to their knees. I am going to report the Plaintiffs lawyer to the florida Bar, for the fraud they attempted on my with the fake assignment of mortgage and other fraud paper. Whereas I do know that I will get nothing from this but I may cause the lawyer to be put in Jail, for attempting to pass off fake paper. i believe from things I have read the Judges are getting the picture.

  10. Mario, I am so glad things are turning around for you. We all have our struggles and some times the paths we set out to venture into are not the same we end up with.

    I believe that Mr. Garfield and all the people who have come into this blog has created a wealth of information that is so powerful that the Bad Guys are spending Millions in seminars, training and schemes of collusion trying to beat the system of finacial freedom this blog offers.

    I have talked to so many lawyers in the last two years that I found myself frustrated and crying at night with my wife and kids because no one was willing to think outside the box, none of these lawyers wanted to be a real lawyer.

    Now our voice is so powerful in our local area that new lawyers are coming on line, they are asking for our feedback, the tide is turning. Now I hear Real Estate agents, and Mortgage Brokers on the radio telling the victims not to hire lawyers, that to give up the house in a short sale or to waste time in a loan modification where you have a 98% chance of not getting is the best way. that using the legal system is a waste of time. I can tell you that through my personal experience the Pretender Lenders have not been able to beat me. That I am still in my home after two years of a costly financial war.

    the first year I had no idea of what to do, I followed my instincts. Now I have a system, a way of doing things that I have been able to share with many other people. I have a card that I give to everyone I meet, whether they are late on their mortgage or not, with the blog site address and I tell them to tell their lawyers to visit the site and learn to be lawyers once again.

    Dear Mr. Garfield, Should an action to quiet title be the first move to find out who are the parties with an alleged interest on your property and in the process amend the complaint?, specially in cases where the person is trying to avoid Bankruptcy and going to court for an issue like this may stop the pretender lender and the pretender trustees from foreclosing?

    What different strategies may be implemented?, is an offensive approach better that being on the defensive??.

    Thanks for your help and commitment.

  11. In the beginning of this mess I felt so alone, I did not think that this would happen to so many other people. I thought that it really was my fault, but deep down inside me I felt that the whole system failed me as I made a lot of money by working long hours in my business, and in the end I lost my business and almost lost my house. I became pro active with respect to defending my rights, and I meet Neil on this site. I was and still am so very grateful, I also know a few people who are very grateful to Neil for his help back then and I still am.

    Neil I thank you, very much I hope you are doing well. I will always respect you, because in this particular area you have more than earned respect, and this is not to insinuate that you owe me or anybody anything because you could have just as well not bothered and live on with your merry life, as a fact of matter you have inspired many a great Lawyer and I know a few lawyers who are very good lawyers who still thank you to this very day.

    I thank you again Neil.

    There are so many selfish people in this world, in this country, people who will not work hard enough to find a good lawyer, and even having done so will not work to pay one. In the past I advocated on not paying enough to my Lawyer, well I am alive today to say I was wrong. I stand before you all to correct myself, for myself and others. In the onslaught none of us had lawyers, Neil was very instrumental in changing this, today many lawyers have ventured into this exciting field of foreclose defense or what ever it has morphed to be called.

    I work for a fine lawyer, Her name is Dawn Rapoport, Neil introduced me to her a long time ago, at first we had a relation of fire and Gasoline, but patience and hard work has worked out. My Lawyer has done wonders for me, kept me in line and out of the reach of the Plaintiffs. Nothing has happened in my case, she kept the front silent and made them leave me alone all by herself.

    I could not ask for better. I was proactive from the get go, you see I knew that I will have to invest the time and dedication to help myself and Dawn helped me so very much I am so very thankful to her, at times I was unhappy but in the end I saw that I was confused as to how this works and its a slow ride home.

    OK well as you see all the things we all spoke about and all the theories Neil has brought up, all came to pass, again thanks to Neil for his hard work. I think he has done this mainly all on his own. I know that some of us did help but the foresight was his and he worked hard he saw the future and what it would become.

    I remember I was the only poster on his blog I felt so ashamed that I would write so much on his blog, many times I called him to tell him how sorry I was and he said to me each time you are helping me!. Neil and I have never met face to face, but we did a radio show together and it was fun, we spoke on the phone a few times. I hope to meet him sometime.

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