Loan scams that prey on the poor

Article Abstract:

The deregulation of banks during the Reagan era allowed second-mortgage abuse to become widespread, and victims have been disproportionately poor. Deregulation at the federal and state levels facilitated this targeting of the poor with a lack of federal regulations covering second-mortgage companies and a failure of the states to take up the slack. Second-mortgage abuse has also been made easier because mainstream banks hesitated to provide credit to poor areas. The situation in South Central Los Angeles after the 1992 riots was a case in point.

Crimes against, Crime, Home equity loans, Bank fraud

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Should regulators check up on the check cashers?

Article Abstract:

Consumer activists claim that the over 10,000 check-cashing and pawn broker businesses across the US are involved in price-gouging. Most of these businesses serve poor communities and can charge as much as 10% to cash a check and impose 20% a month finance charges on pawn shop loans. Because banks do not cater to the lower classes that frequent check-cashers the cashers and pawn-brokers are able to charge outrageous interest. Only three states regulate the industry and a powerful lobby cuts down most attempts at regulation.

Ethical aspects, Pawnbroking, Check cashing services

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How the poor pay more: big premiums on big ticket items

Article Abstract:

The rent-to-own industry, begun during the 1960s, exploits the poor by charging a great deal more over time than merchandise would cost the poor if they could pay in cash. The industry tries to justify the high prices by saying they include maintenance services, but terming the extra cost a service charge rather than interest also exempts them from state usury laws. Lawyers for the poor also charge other abuses such as selling used goods as new and threatening criminal action when customers are late with their payments.

Finance, Lease or buy decisions

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