Rent to Own Heroes
Rent to Own Zeroes
0: Peter Verniero
Second Mortgage Heroes
Second Mortgage Zeroes
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Bankruptcy Heroes and Zeroes
N.J. HEROES: who opposed the awful Bankruptcy "Reform"
Act were Congressmen Donald Payne, Frank Pallone Jr., Bill Pascrell
and Rush Holt, and Senators Jon Corzine and Frank Lautenberg.
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ZERO, six figures: N.J. Former Senator Robert Torricelli sponsored
the anti-consumer bankruptcy bill. It's time to listen to average
people, Senator, not just bankers wanting to donate money! MBNA
credit card bank gave the Senator $150,000 for the Democratic
senatorial campaign. Campaign finance reform ought to mean an
end to favored treatment for these fat cats. It is illegal to
pay money to a Judge deciding your case-- the same standard ought
apply to members of Congress!
Zero George W. Bush took $250,000 of MBNA's money. He is against
bankruptcy for the middle class, but he supports the Texas and
Florida laws which let millionaires shield $10 million mansions
from creditors in bankruptcy. If anything in bankruptcy needs
reform, it's loopholse for the millionaires! One of his supporters
specializes in high interest loans to the poor.
Kudos to former Senator Howard Metzenbaum (OH) for the 1994
bankruptcy amendments letting N.J. homeowners save their homes
through Bankruptcy payment plans.
Rent to Own Heroes
U.S. Representative Mike Ferguson gets a hero badge for voting
against HR 1701, on November 28, 2001. This bill would legalize
unlimited interest (yes even 300%) plus prohibit government from
mandating disclosure of the Annual Percentage rate, so the consumer
victims won't know how badly they have been taken.
Consumer heroes at the Fall 1998 Assembly Hearing on rent
to own were Assemblywomen Nia Gill and Loretta Weinberg,
who argued and voted against the anti-consumer A.1097. Ms. Weinberg
deftly refuted the claim that the rent to own industry is mainly
"renting" goods short term. She pointed out that what
A.1097 does is to legalize the "OWN" in rent to own:
the entire point of the bill is to permit sales at usurious rates.
Asm. Anthony Impreveduto got a RTO operator to admit that he
sold $400 washers for $900. [This is interest at 125% annual
percentage rate!] So Asm. Impreveduto said: "Then
it's true!" and he asked "Isn't 30% interest enough
for anyone?"
Other heroes are Asm Bagger and Senator Diane Allen, for sponsoring
the pro-consumer bill, and Asm Geist and AssemblymanWilfredo
Caraballo for their vigorous condemnation the the rent to own
industry in the January 1998 Assembly vote. However, we must
repossess Asm Caraballo's hero award because in 2005 he sponsored
the pro-industry bill A. 3851 which would exempt rent to own
from New Jersey's 30% criminal usury law.
Media heroes are the Asbury Park Press, the Record, and all
the other newspapers which denounced rent to own bills in editorials.
The Asbury Park Press has also been honored for its 1997 series
of articles "House of Cards," which detailed how loose
lending standards brought ruin to many unsuspecting homeowners,
and brought doen lender Walsh Securities Inc.
New Jersey Public Interest Research Group Citizen Lobby, Jerry
Flanagan, Benita Jain get great praise for lobbying until literally
the final hour of the last Assembly session (Jan. 1998) when
the industry's RTO bill fell short. This year rent to own is
back again with the same bad bill.
Rent to Own Zeroes
The Assembly zeroes voting for A.1097 in Fall 1998 were chairman
Jeffrey Moran, and Asm. James Holzapfel, Asm. Michael Arnone,
Asm. Joseph Azzolina, and Asw. Barbara Wright. In the Senate,
Senators Cardinale, Singer and Lesniak voted with the industry.
In 1987-98, Speaker Jack Collins and Senator Donald DiFrancesco
helped the RTO industry by posting the RTO special interest bills
for floor votes.
Special shame belongs to former Attorney General Peter Verniero,
who blocked in 1998 and 1999, any testimony by the NJ Division
of Consumer Affairs which would have opposed the rent to own
bill. Lawyers from the Attorney General's office actually participated
in the three lawsuits, whose unanimous result was that RTO violated
the laws of New Jersey. The N.J. Division of Consumer Affairs,
Director Mark Herr, has sided with the consumer against rent
to own bills, but in the last year, any pro-consumer voice has
been silenced by Attorney General Verniero. No one from New Jersey
state government testified against rent to own in the fall and
winter of 1998-99, when RTO came within four votes of legalizing
loanshark rates! This Attorney General has appeared in the Legislature
to denounce the petty theft of ticket scalpers, but he appears
blind to the widespread violation of the criminal usury law which
was revealed in the suit Green v. Continental Rentals
(1994). Rent to own is directed against the poor and urban residents.
Folks with a car and a credit card go to Sears at the mall. Consumers
League thinks the Attorney General should protect the poor, and
we would love to have state government on the side of consumers.
Representative of the Kean and Florio administrations testified
against rent to own special interest bills, which is why New
Jersey has not legalized this loansharking scam.
The Division of Consumer Affairs could also promulgate a Regulation
to end the abuses which three jurists found violated N.J.'s Consumer
Fraud Act.
An ironic hats off to our adversary Dale Florio, the lobbyist
for the rent to own special interests. Mr. Florio was Governor
Whitman's fundraiser. Mr. Florio has been very industrious in
selling the Legislature on legalizing loanshark interest rates,
as a convenience to the urban poor. Apparently many members of
the Legislature wish to do him favors. Mr. Florio's argument
is that, if not for rent to own, the poor would get no televisions.
CLNJ replies, that when New Jersey starts enforcing the current
30% criminal usury law (NJSA 21:12-19), then the urban poor will
get $250 televisions for $300 on credit, (instead of $1,000)
because they will get them at legitimate merchants, not at rent
to own.
Second Mortgage Heroes
Journalist hero Jonathan Kwitney died young, in 1998, but CLNJ
has a long memory, and honors his work. Working for a small NJ
newspaper, Mr. Kwitney wrote a classic expose circa 1965 about
abuses in second mortgage lending by finance companies. People
lost their homes for $3,000 mortgages then, with heavy "points"
and unfair credit practices. A Real Estate Commission was convened
to investigate, and the N.J. Legislature passed the "Secondary
Mortgage Loan Act," which was certainly the strongest such
law in the country. The Act prohibited points and other charges,
and the penalty was that the mortgage would be "void"
if the law was broken. In those days, the Legislature actually
passed pro-consumer laws!
Twenty years later, the industry lobbied the Legislature to weaken
this fine law. Consumer heroes in defending the law were John
Thurber of the former N.J. Public Advocate's Office, and NJPIRG
and its former chief lobbyist Rob Stuart.
Second Mortgage Zeroes
Senator Raymond Lesniak and Asm Louis Kosko led the charge to
weaken the law at the behest of Beneficial Finance Co. and the
Money Store. Banking Commissioner Mary Little Parrell supported
the industry bill to weaken the law. After five years of lobbying,
the industry got the good law weakened.
In 1988, only a few months after New Jersey passed a list
of anti-consumer measures, the US Congress enacted a Home Equity
Consumer Protection Act which included an idea from CLNJ testimony
before the US Senate: Congress prohibited "rate rise surprise"
which would have let mortgage lenders change the method of interest
rate calculation AFTER you signed the contract! Congress prohibited
one of the abuses N.J. would have permitted. |