Daily Archives: August 18, 2016

Payday lending is evolving, and not for the better

cartoon-loopholes

The payday lending industry is evolving, but its newest products may simply provide consumers with a different route into a money hole.

Payday lenders are increasingly turning to installment loans, with all of America’s biggest payday lending companies now selling the products, according to new research from Pew Charitable Trusts. Instead of requiring repayment of a loan within days or weeks, these products are repayable over several months.

On the face of it, these loans may seem like a better deal for borrowers because they provide more time to repay the lender, and consumers tend to prefer an installment payment structure, Pew found. Yet the foundation is warning that the installment loans carry many of the same hallmarks of the traditional payday loans, such as sky-high interest rates. And lenders are shifting to installment loans partly because the products sidestep some state regulations and the Consumer Financial Protection Bureau’s (CFPB) proposed payday lending rules.

Read on.

Walmart is too cheap to pay for proper security — so now it’s freeloading off taxpayers

Memo to Walmart: Get off of welfare and quit loafing off of the taxpayers!!!

Walmart’s traditional modus operandi has been to offer the lowest prices by slashing operating expenses wherever it can find them — including wages and benefits.

In fact, Walmart is so cheap that, back in 2013, a store in Ohio held a food drive to help make sure some of its own employees wouldn’t go hungry on Thanksgiving.

With this in mind, it’s not too surprising to learn that Walmart is also dirt cheap when it comes to paying for proper store security — and it’s putting a strain on local police budgets.

Bloomberg Businessweek has a very detailed new report that shows how police departments around the country are getting fed up with Walmart’s unwillingness to invest in proper store security infrastructure. In fact, it seems that Walmart’s security is so notoriously lax that its stores have become magnets for criminals who know it will be easier to commit crimes in them.

Read on.

HUD mortgage sales harm black neighborhoods, lawsuit says

New lawsuit follows Center for Public Integrity report on mortgage sales

New York City homeowners filed a class action lawsuit on August 12 alleging that auctions of government-insured mortgages discriminate against predominately African-American neighborhoods.

The lawsuit involves a U.S. Department of Housing and Urban Development (HUD) program that since 2010 has auctioned delinquent mortgages insured by HUD’s Federal Housing Administration (FHA).

The program, the lawsuit states, strips homeowners of FHA protections without first informing them that their mortgage could be sold.

The Center for Public Integrity first investigated the HUD program in 2015, finding that the mortgages were sold at a steep discount and only 16.9 percent of mortgages sold between 2010 and 2014 successfully avoided foreclosure.

As part of that investigation, the Center for Public Integrity mapped the results of HUD’s auctions in New York City and Baltimore. The map showed that the mortgages clustered in neighborhoods with a higher proportion of minorities.

Read on.

Company That Sued Soldiers Settles Colorado Lawsuit

hat, contrary to its name, specialized in enticing military service members into overpaying for furniture, electronics and appliances. When they fell behind on the high-interest loans, the company often took them to court in Virginia — a few miles from the company’s headquarters, but often nowhere near where the service members were based. With court judgments in hand, the company gained the power to seize money from soldiers’ paychecks or bank accounts.

Since our story ran, USA Discounters has gone out of business and declared bankruptcy, but still has faced legal challenges over its practices. This summer the company settled with the attorney general of Colorado over a suit filed last year.

The state’s suit focused on the company’s collection techniques, but it also alleged that USA Discounters had charged interest rates above what is allowed in Colorado. The deal involves a penalty of $1 million and breaks for thousands of customers on outstanding debt. Although the company has shut down its stores, it continues to collect on outstanding loans.

As part of the deal, USA Discounters did not admit or deny wrongdoing. The company disclosed in a filing in its bankruptcy case that other regulatory investigations are ongoing.

Read on.

Trump casinos’ tax debt was $30M, settled for $5M after Chris Christie took office

Interesting…

A new report details how a $30 million tax debt that Trump casinos owed New Jersey was settled for far less after Gov. Chris Christie took office.

Before the settlement for $5 million, the Times reports that for several years lawyers and auditors had been fighting to collect overdue taxes owed by Trump’s casinos, which had grown to a total $30 million including interest.

But the year after Christie took office, the state began to consider settlement offers. By the end of 2011, the state agreed to accept 17 cents on the dollar of what the casinos owed, the Times reported.

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Ex-JPMorgan Banker Convicted of Insider Trading

Law360, New York (August 17, 2016, 10:18 AM ET) — A federal jury in Manhattan on Wednesday found former JPMorgan Chase & Co. banker Sean Stewart guilty of insider trading, for what prosecutors say was a scheme to leak confidential information about health care company mergers to his father.

Sean Stewart, left, leaves Manhattan federal court with his lawyer Mark Gombiner after opening statements in Stewart’s insider trading trial in July in New York. (Credit: AP) On the morning of the sixth day of deliberations, the jury of eight women and four men convicted Sean Stewart…

Source: Law360

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SEC fines, bans former Goldman Sachs head RMBS trader for fraud

But not one bankster execs are criminally charged…

The former head trader of residential mortgage-backed securities for Goldman Sachsrepeatedly lied to the firm’s clients and overcharged mortgage bond buyers, generating millions of dollars in extra revenue for both Goldman Sachs and himself in the process, the Securities and Exchange Commission stated Tuesday.

According to the SEC, Edwin Chin, who served as Goldman Sachs’ head RMBS trader from 2010 through 2012, agreed to settle charges brought by the SEC that he lied to clients about the prices of RMBS deals, frequently misrepresenting not only the prices that Goldman Sachs paid for the mortgage bonds, but whether the bonds were sold out of Goldman Sachs’ inventory or not.

As part of the settlement, Chin will pay a fine of $400,000 and is barred from working in the securities industry for at least two years, the SEC said.

According to a statement from Goldman Sachs, the firm fired Chin in 2012 after the allegations of his misconduct first surfaced.

Read on.