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Comedian Tim Clue Jokes About Debt, Credit Cards and Bill Collectors

I stole this off Dan Nunley's Oklahoma Bankruptcy Lawyer Blog.  Enjoy.

It Is Time We Curb Bank Overdraft Fee Abuse

It has reached the point of embarrassment, that is for everybody but the banks.  I am talking, of course, about the sky high and rapidly increasing overdraft fees charged.

Now, three Democratic lawmakers have asked the Federal Reserve to curb charges that banks levy on customers when they make a purchase with a debit card and overdraw an account. The fees can mount up quickly and cost consumers more than their actual purchases.  Known as "overdraft protection," and consumers often don't even know that they have the unasked-for convenience until the charges appear on their accounts.

House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.), along with Rep. Carolyn Maloney (D-N.Y.) and Rep. Luis Gutierrez (D-Ill.), sent a letter to Federal Reserve Chairman Ben Bernanke asking the Fed to strengthen planned regulation of overdrafts.

"Overdraft abuses related to debit card purchases and ATM withdrawals are particularly egregious for at least two reasons," the lawmakers wrote. "First, overdraft fees triggered by these transactions, which could easily be denied at the terminal, often take consumers completely by surprise. Second, an overdraft fee charged on a typical debit card purchase is vastly disproportionate to the amount of the overdraft itself."  The lawmakers want the Federal Reserve to require institutions to obtain the written consent of their customers before enrolling them in overdraft protection.

Overdraft charges represent one of the biggest slices of the short-term unsecured credit market.  It is bigger than credit card over-the-limit penalties, and much bigger than payday loans, bringing in $34.7 billion in revenue for banks and credit unions in 2008, compared with $7.3 billion for payday lenders.

Payday loans are often vilified for their high costs, and they're illegal in 15 states. The annualized percentage rate (APR) of interest on a typical payday loan is 400 percent or more, according to the Consumer Federation of America. But that's nothing compared with the overdrafts the lawmakers are targeting.  The Federal Deposit Insurance Corporation released a survey in January 2008 that broke down the average cost of overdraft fees to consumers and found that a typical $27 overdraft repaid in two weeks incurred an APR of 3,520 percent.

Just how bad is it when the banks and credit unions are charging more in terms of interest than are payday lenders?

New Credit Card Law Will Also Restrict FreeCreditReport.Com - Style Ads

We have all seen the TV spots of companies, and especially FreeCreditReport.Com, advertising FREE credit reports.  I have always wondered how they can afford to saturate the TV airwaves for a free service.

Well, the new credit card reform bill signed into law by President Obama will not just try to put a stop to several unfair practices of the credit card industry -- it also targets misleading advertisements for phony "free" credit reports.

The law calls for the Federal Trade Commission to issue new rules that will force free credit report advertisers to inform consumers that the only place for a free credit report is AnnualCreditReport.Com.  And, TV and radio ads will also be required to include the statement: "This is not the free credit report provided for by Federal law."

Under the Bush administration, the FTC repeatedly fined the folks behind FreeCreditReport.Com for deceptive advertising, since you only get the "free" report after enrolling in a $15-a-month credit monitoring program. But the fines amounted to mere wrist-slaps.

Online Payday Loan Companies Are Loan Sharks That Trap People In Debt And Then Disappear

Not enough, maybe, but at least Congress has started to do something about the deceptive credit card industry.  Now it is time for it to tackle an ever growing menace known as the payday loan industry and especially the online payday loan industry.

If you are interested, Huffpo has a post on the subject, we review here, and the site is looking for your horror stories as well.  You can email those payday horror stories to Huffpo at this email address -

submissions+debt@huffingtonpost.com

What Huffpo reported was that the online payday lending industry group, Online Lenders Alliance, wrapped up a 3-day conference near the White House, where they pandered to senators and congressmen from both parties.  Or, maybe, the pandering was the other way around.

Regardless, the purpose of the OLA is to weed out the bad apples of the industry by requiring its members, none of which are listed on its website, to comply with good business practices.  But, you know, good business practices do not always represent moral or even consumer friendly practices.  You can be a loan shark and still account for your profits appropriately.  Also, not many payday lenders promote themselves as being part of the OLA.

What is obvious, however, is that online payday loans are becoming more of the norm. Online payday loan lenders loaned (?) approximately $7.1 billion in volume for 2008 according to one estimate.

Consumer advocates sent a letter to members of Congress urging them to ignore the conference and implement a cap on interest rates.  There point was that online payday loans are layering a whole other set of risks on top of a product that is set to fail by its basic structure.

As quoted in the article, Dale Pittman, a consumer protection lawyer who represents victims of debt collection harassment and abuse in Petersburg, Va., has some experience tracking online lenders. He said, "It's hard as hell to find these people ... You can't communicate with them and tell them what they're doing is illegal." Thirty-five states have enacted interest caps that effectively ban payday lending, but Virginia isn't one of them and so online payday loan lenders are avoiding these caps.  Pittman tried to track down several online lenders on behalf of a client who was drowning in debt after taking out multiple payday loans over the course of a year. None of the lenders had a license, as far as Pittman could tell, so all the loans were illegal.  He also could not find but one of the lenders.

The same problem is occurring in a bankruptcy setting.  Whether or not it is an automatic stay or discharge injunction violation to submit an actual check for payment on an account which was issued before the filing of the bankruptcy, most of these lenders no longer accept actual negotiable instruments.  Not only do these payday sharks ding  bank accounts all of the time, but if they recover money that money will likely have to be returned if any turnover adversary is filed.  But, try to find the company.  The bank statements are not much help.  Usually the trail is so difficult to uncover and the potential recovery is small enough that most bankruptcy attorneys do not believe it is worth their time, especially if they cannot recover attorneys fees if no stay violation is found.  The debtor in bankruptcy, however, is made to suffer.

The Mortgage Fraud Industry

No, the U.S. Senate did not believe that consumers and ordinary people deserved any mortgage relief, but it gave hundreds of billions of dollars to the mortgage industry.  Mortgage modification was denied to the bankrupt consumer to protect an industry where fraud was so pervasive that it deserves not to be called the mortgage industry but the mortgage fraud industry.  Watch and share this video.