Is the Payday Lending Industry Welfare Enhancing, or is it Predatory?

Last week we blogged about the Fed staff article “Defining and Detecting Predatory Lending”, by Donald P. Morgan. At the time, however, we did not have an actual copy of the article in our hot little hands. Now we do. As we said before, the article posits that the availability of credit is welfare enhancing, and that, since payday loans increase the availability of credit to consumers of modest means, the payday lending industry is welfare enhancing.

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Fairway Trails Apartments to Pay $50,000 to Settle Fair Housing Case

According to an article in the Detroit News last week, Fairway Trails Apartments in Ypsilanti, Michigan, will pay $50,000 to settle a lawsuit brought by a disabled man who asked to delay his rent payment by a few days to coincide with the arrival of his Social Security check.

The lawsuit alleged that Fairway Trails retaliated by attempting to evict Harry Tyus, 58, when he asked for the late rent payment. Mr. Tyus went to Fair Housing Center of Southeastern Michigan, who worked with the U.S. Department of Justice throughout the claim process at HUD (PDF link) and in U.S. District Court (PDF link).

As a point of clarification, the case involved retaliation. A landlord may not retaliate when a tenant requests a reasonable accomodation, whether or not the accomodation requested was reasonable or based on a qualifying disability. Congress decided that the reasonableness of a request should be determined by HUD or the courts, not individual landlords.

Minnesota Attorney General Proposes Criminal Penalties for Consumer Predators

The findings come from a panel convened by Attorney General Lori Swanson and chaired by Prentiss Cox, professor at the University of Minnesota Law School. The suggestions to add criminal penalties on top of already-available civil ones is a result of the startling rise in foreclosures we have been reporting on at length.

The possible problem with the criminal sanctions is that many police departments lack the expertise to prosecute such claims, particularly because they involve so many thorny legal issues. The Attorney General only prosecutes “big” cases as a general rule, and so this will likely provide little deterrence to small-time predatory lenders. However, any additional remedies for consumers is a welcome change.

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ABC News Investigates Debt Collection

In a sensationally-titled report, “Debt Collectors Gone Wild,” ABC News reports on the results of a three-month investigation into debt collector practices. Unsurprisingly, ABC found that “many unscrupulous collectors routinely ignore the law.”

Rozanne Andersen of ACA International, however, would like you to know that “the vast majority of debt collectors follow the law and that the image of the bullying, abusive collector is an old stereotype. According to Anderson, “A debt collector is not the enemy of the consumer. His or her job is to help find a solution and help the person figure out a way to pay the debt.”

Ms. Andersen must be well paid. More on ABC’s findings, including collection call transcripts, after the jump.

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Judge v. Judge

Michigan Supreme Court Justice Elizabeth Weaver is a “sad, angry woman” according to Michigan Supreme Court Chief Justice Clifford Taylor. She, in turn, has little flattering to say about her Democrat Republican colleagues on the bench. Anyone who thought judges are above such petty—and apparently partisan—bickering, take note: judges can be just as petulant and childish as the attorneys who appear before them. As a profession, we are a long way from Atticus Finch.

Foreclosures: Not Just a Devastating Loss Anymore!

Nope, not at all. With the growth of foreclosures, due in part to the rise in nontraditional mortgages, equity stripping, and predatory lending generally, the foreclosure purchaser market is booming!

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Mortgage-Trapped

Minnesota Association of Realtors is #4 in Lobbying Dollars in Minnesota

The Minnesota Association of Realtors spent $435,640 on its lobbying efforts, according to a recent Business Journal article, making it the fourth biggest spender in Minnesota. That’s a pretty powerful lobby.

To put that in perspective, the MAR spends more than the Minnesota Twins (#14) and Philip Morris (#19). The Twins recently completed a big push for a stadium, and the Vikings have been working hard on that, as well, but don’t even show up in the top 20. And Philip Morris is presumably rather interested in the Minnesota legislature’s perennial efforts to eliminate smoking in all bars and restaurants in the state.

What could be so important to the MAR that they are spending a half million dollars a year?

BlueHippo is a Cute, Cuddly Ripoff

ConsumerAffairs.com recently completed an investigation into BlueHippo, a credit provider that takes advantage of wide-eyed consumers looking to purchase “one of those computer things.” We haven’t seen the commercials ourselves, but a blue hippo romping around with upside-down signage sure does sound appealing. As a credit lender? Maybe not, but I assume I am not the target audience.

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Screech Gets a Foreclosure Notice

Apparently even “celebrity” can’t save you. Dustin Diamond, a/k/a Screech from Saved by the Bell, is facing foreclosure. He’s selling t-shirts to raise money to redeem his mortgage.

The story is a bit disjointed, but sounds similar—minus the “old friend with lots of connections—to the stories we hear all the time from non-famous consumers facing foreclosure.