State Government Do?
On August 15, Karen
Suter, N.J. Commissioner of Banking and Insurance held a hearing
on predatory lending. Here's what CLNJ had to say:
Rent to own is a credit
sale pretending to be a lease. Interest rates are typically 100%
to 300%. RTO stores and RTO sales are quite common in urban areas
of this state, despite three court decisions holding, inter alia,
that RTO routinely breaks the 30% criminal usury law, or that
RTO violated the NJ Consumer Fraud Act. One might expect N.J.
State Government to enforce the criminal usury laws. CLNJ was
saddened when the state government stood silent in the most recent
RTO hearings- not testifying - when some members of the Legislature,
who received contributions from this "industry," proposed
to place a Legislative stamp of approval on a formula allowing
100% interest and discriminatory, second- class lending for the
poor. Predatory lending is a civil rights issue. We hope that
Commissioner Suter takes positive pro- consumer steps to enforce
Kicks Off Its Second Century With Centennial Dinner
Consumer Conference in Colorado
ought to enforce the criminal usury law, NJSA 2C:21-19, the Consumer
Fraud Act, and the Retail Installment Sales Act against RTO sellers
who are breaking such laws. The Executive branch ought to testify
in the Legislature for consumer bills on rent to own and
against industry proposals to legalize predatory lending. The
laws should be clarified that RTO is a retail installment sale
(as all Courts held) and is subject to the 30% criminal usury
NJ needs a law so that a homeowner with a long term mortgage, tainted by fraud or predatory practices, could request a declaratory judgment at any time, to get a Court to let the consumer stop paying. Currently, after the first six years, the consumer has to default and risk losing her home in foreclosure suit, just to object that the mortgage is void. If the state is serious about fighting predatory lending, it would let the victims of predatory lending sue, at any time, for a Court's declaration that the homeowner owes no more money.
The Licensed Lenders
Act should not allow balloon payments at the end of three years
for second mortgages. Repeated refinancing means repeated fees,
deeper debt, more foreclosures.
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