Daily Archives: December 28, 2015

At Capital One, Easy Credit and Abundant Lawsuits

This story was co-published with The Daily Beast.

Several years ago, Capital One gave Oscar Parsons, 46, his first credit card. At the time, he didn’t need a loan. But he banked at a Capital One branch near his Bronx apartment, and when it was offered, he thought, “Why not?”

Initially, he had little problem keeping up with the payments. But after a run of construction jobs came to an end, he fell behind and found himself ducking the bank’s collections calls, he said. Each time the company’s TV commercials popped up, asking, “What’s in your wallet?” Parsons thought: “It’s not enough to pay you back.”

This year, Capital One provided Parsons with another first: his first lawsuit. For failing to pay his $1,800 debt, the company took him to court. Currently on public benefits and in a job training program, Parsons has nothing Capital One can take. But should Parsons find work, Capital One could use a court judgment to seize money from his bank account or take a portion of his wages.

It was a hard lesson — one learned by hundreds of thousands of the bank’s cardholders. No lender sues more of its customers than Capital One, according to ProPublica’s review of state court data.

Over the past year, ProPublica has sought to illuminate the scope of debt collection lawsuits, which, though they are often filed by public companies in public courts, are a largely hidden part of the nation’s financial life. The suits hit workers who earn below $40,000 a year the hardest and federal garnishment laws provide scant protection. Even workers near the minimum wage could have a quarter of their take-home pay taken or their bank accounts cleaned out. State laws typically offer little more protection.

To identify which companies file the most collection suits, ProPublica obtained and analyzed court data from 11 states. In every state, Capital One stood out.

During the years of the recession, particularly 2008 through 2010, when the number of credit card defaults surged, many banks filed more lawsuits. But Capital One dwarfed them all, reaching levels never matched by any company before or since, according to ProPublica’s review of data going back to 1996.

By our estimate, the suits exceeded half a million per year nationally during those peak years.

Since 2011, Capital One’s suits have dropped considerably, though they have continued to far exceed the totals of any other bank. For example, in Indiana counties for which court data is available — home to about two-thirds of the state’s population — the bank filed about 3,360 suits in 2014. That’s about a quarter of the suits Capital One filed in 2010, but still more suits than all other national banks combined in 2014. In Clark County, Nevada, which includes Las Vegas, Capital One’s suits comprised about 40 percent of all suits by major banks. In Miami-Dade County, Florida, the tally was about the same.

Read on.

Trump chides Wall Street bankers but has relied heavily on them to build his business

As Donald Trump has barnstormed his way across America in recent months stirring up the Republican heartland with populist invective, it is not just immigrants the billionaire property tycoon has had in his sights.

The frontrunner for the Republican presidential nomination has also waged a vituperative campaign against Wall Street, accusing hedge funds of “getting away with murder” — somewhat to the entertainment of the bankers who helped finance the rise of his business empire.

“I have been highly amused about Trump’s comments about us given he’s almost one of us, at least in a business sense,” said one Wall Street banker whose group has provided Mr Trump’s properties with millions of dollars in financing. “He is totally comfortable around Wall Street and bankers.”

Wayne County families sue over ‘illegal’ foreclosures

Eighteen families on Monday sued the Wayne County Treasurer’s office and several Metro area cities in U.S. District Court arguing their properties were illegally foreclosed on and sold to developers.

The families are asking a judge to grant a temporary restraining order to prevent the developers from evicting them from properties in Garden City, Dearborn, Lincoln Park, Redford Township and Wayne.

Attorney Tarek Baydoun, who represents the families, alleges the treasurer’s office led owners to believe they still had time to save their homes before the county foreclosure auction, while county officials worked with the cities to illegally take the homes.

Baydoun says the treasurer’s office failed to send out foreclosure notices by first-class mail, as it has in past years. And the contractor tasked with making personal visits to the homes to notify residents of the impending foreclosure never showed up, the complaint alleges.

Baydoun also says the county blocked his clients from signing up for payment plans that would have removed them from the threat of auction.

Read on.

Minorities exploited by Warren Buffett’s mobile-home empire

Third of a series

GALLUP, N.M. — After a few years living with her sister, Rose Mary Zunie, 59, was ready to move into a place of her own.

So, on an arid Saturday morning this past summer, the sisters piled into a friend’s pickup truck and headed for a mobile-home sales lot here just outside the impoverished Navajo reservation.

The women — one in a long, colorful tribal skirt, another wearing turquoise jewelry, a traditional talisman against evil — were steered to a salesman who spoke Navajo, just like the voice on the store’s radio ads.

He walked them through Clayton-built homes on the lot, then into the sales center, passing a banner and posters promoting one subprime lender: Vanderbilt Mortgage, a Clayton subsidiary. Inside, he handed them a Vanderbilt sales pamphlet.

“Vanderbilt is the only one that finances on the reservation,” he told the women.

His claim, which the women caught on tape, was a lie. And it was illegal.

Read on.