Fall 2007 77 Summer Street, 10th Fl. Boston, MA 02110 617 542-8010 Outlook www.NCLC.org NATIONAL CONSUMER LAW CENTER Largest Gift Ever Awarded to NCLC

Protecting $2 Million Cy Pres to Benefit Vulnerable Low-Income Consumers Consumers Overcoming the vehement said. “An award of this size is a objections of defense counsel, testament to the Center’s and attorney Yvonne Rosmarin extraordinary expertise and its Promoting directed a cy pres award of commitment to justice in the $1.958 million to NCLC as part marketplace.” Marketplace of the settlement of a con- In April, NCLC celebrated the sumer class action against Justice cy pres with a lunch to honor Fleet Bank (now Bank of Rosmarin in our Boston offices. America). In presenting her a plaque and Bryan Kemnitzer, chair of a mock Time Person of the Year NATIONAL NCLC’s Partners Council, was cover, executive director CONSUMER LAW elated when he heard the Willard P. Ogburn lauded CENTER news. “It’s just a magnificent Rosmarin’s efforts. S day for NCLC and for consum- ers across the country,” he “Yvonne’s courageous and Rosmarin at an NCLC appreciation Continued on page 2 luncheon held in her honor this spring.

Inside NCLC Reports Expose Unfair Practices Three new NCLC reports are we’ve done on issues such as Tucson Electric, and Arizona Outlook calling for reform of practices credit counseling abuses, fore- Public Service - to stop using Rosmarin’s $2 M Cy Pres 1-2 that negatively affect consum- closure rescue scams, and pred- payday lenders as bill ers: utility payments at payday atory lending targeted at the payment centers. NCLC Reports 1 & 12 lenders; bankruptcy counsel- military, we expect they’ll start Credit Reporting Litigation 3 ing and education require- momentum for positive reforms.” “It has been a stunning Cy Pres for NCLC 4 ments; and insurance credit exodus,” Kreis Mayes, a scoring. Rural Initiative 5 Utility Customers Exposed to member of the Corporation Predatory Lenders Commission that regulates Elder Energy Costs 5 “These reports are bringing Within days of publication, our utilities, told the Arizona Congressional Agenda 6 needed attention and scrutiny report “Utilities and Payday Republic. “I have never seen NCLC Fights for Consumers 7 to problems that are particu- Lenders: Convenient Payments, the utilities move so fast.” larly harmful to low-income Killer Loans” got results. The Foreclosure Crisis 8 consumers,” said Willard P. report helped persuade Arizona’s Our report describes a sym- NCLC Donors 9 & 10 Ogburn, NCLC executive three largest privately owned biotic relationship in which director. “As with earlier reports utililties - Southwest Gas, Continued on page 12 www.NCLC.org Fall 07 OUTLOOK Page 1 Rosmarin Overcomes Fierce Resistance from Banking Giant, Directs $2M Cy Pres to NCLC Continued from page 1 Council. persistent advocacy for NCLC is setts Consumer Protection Act. The decision was everything She charged Fleet with failing the only reason we got this she could have asked for. In a to properly disclose the NCLC’s staff has begun a award. She was steadfast 3-0 ruling, the appellate panel effective date of adverse reversed the district court and planning process to determine throughout the negotiations changes to fees, including held that Fleet had indeed how best to use the funds on and meticulous in preparing higher fees and minimum bal- violated TISA and the MCPA. behalf of low-income consum- every argument on our behalf,” ance requirements on customer Rosmarin then negotiated a ers. “We take very seriously said Ogburn. bank accounts, and engaging settlement agreement that the responsibility that comes in other inaccurate or mislead- provided $12.5 million in with an award of this magni- It’s just a magnificent ing announcements of such damages to the class members tude. This is a once in a life- day for NCLC and for changes. and for leftover funds to be time opportunity, and we want consumers across the distributed through a cy pres to take care and time to make The case hit a roadblock when remedy. the most of it,” said Ogburn. country.” the district court ruled against Bryan Kemnitzer, Chair, NCLC No stranger to NCLC, Partners Council Rosmarin’s client on summary When Rosmarin recommended judgment. But Rosmarin was NCLC as a cy pres recipient, Rosmarin was a staff attorney at Rosmarin was the lead attorney undeterred. With help from the defense reacted coolly, at the Center for seven years in in a hard-fought class action the law firm of Edelman, best. But Rosmarin would not the late 1980s and early 1990s. lawsuit against Fleet for Combs, Latturner & Goodwin, back down and insisted that, in She left to start a private violating the federal Truth in she appealed to the U.S. Court fact, NCLC was an ideal practice in Arlington, Mass. Savings Act and the Massachu- of Appeals for the 1st Circuit. recipient. (www.YourConsumerLaw.com) where she focuses on credit NCLC Cy Pres Donors In the end, months later, reporting, auto fraud, debt collection abuse, credit card July 06 – August 07 Our special thanks and appreciation to the following individuals “Yvonne’s courageous problems, mortgage abuse, and who have generously directed court awarded funds to the Center: and persistent consumer class actions. Barry Altman William E. Kennedy advocacy for NCLC is “As a former staff attorney at Stacy M. Bardo Bryan Kemnitzer NCLC I know first hand the Nancy Barron Steve Larson the only reason we got wonderful work it does on Leonard A. Bennett Robert I. Lax this award.” behalf of low-income consum- F. Paul Bland Jr. Christopher LeFebvre Willard P. Ogburn, executive director Thomas E. Boland Peter S. Lubin ers and the essential support it provides consumer attorneys Scott C. Borison Scott Maurer Rosmarin’s persistence and and advocates,” said Rosmarin. O. Randolph Bragg Joseph Mauro skilled negotiating tactics paid “It’s gratifying to know that this Brian L. Bromberg Niall P. McCarthy off and a settlement was Mark A. Chavez award will help ensure the David J. Philipps reached that evenly divided Joanne S. Faulkner health and vitality of the Michael J. Quirk leftover cy pres funds among Joel Feldman Center for many years to come.” Lance A. Raphael NCLC, Greater Boston Legal James A. Francis John Roddy Services, and City Year. Ronald I. Frederick Yvonne W. Rosmarin Cy Pres will help Suzanne Garrow David A. Searles “We’re enormously grateful to Eric H. Gibbs Alec B. Trueblood ensure the health Yvonne for her extraordinary Daniel C. Girard Eric Wright work on this case and for her Colman M. Herman Donald A. Yarbrough and vitality of NCLC Edwin H. Howard selection of NCLC,” said Mark Chavez, of NCLC’s Partners for many years Fall 07 OUTLOOK Page 2 www.NCLC.org Lawsuit Charges Credit Reporting Agencies with Undermining Bankruptcy System consumers, it nonetheless was the credit reporting agencies cumulative costs are probably Debts Discharged unduly limited and insuffi- rely on the consumers’ creditors hundreds of millions of dollars cient to justify approval of the in Bankruptcy, (and not public court records) a year in finance charges overall proposed settlement. But Not According to voluntarily update the status alone.” of the accounts they maintain The court then ordered the on consumers who receive NCLC is co-counsel in a class to the Credit Report competing cases consolidated. Chapter 7 discharges. Unfortu- Discovery in these cases, as well According to class action nately for consumers, their as the one against Experian for lawsuits filed by NCLC, the creditors have no incentive to the same misreporting prac- nation’s giant credit reporting update their reporting of the tices, is now underway, with agencies are undermining the accounts to the credit reporting motions for class certification ‘fresh start’ that is at the heart agencies. Even worse, many to follow. of the bankruptcy process. creditors fail to do so in order After completing a Chapter 7 to pressure the consumer into In addition to NCLC’s Delbaum bankruptcy, the vast majority paying the debt that was and Rossman, the litigation of a consumer’s debts are discharged in bankruptcy. team includes lead counsel discharged by a court order, And despite receiving com- Michael Sobol of Lieff, which should allow the person plaints from thousands of Cabraser, Heimann & to rebuild his finances with a consumers over the past several Charles Delbaum, NCLC staff attorney Bernstein; Michael Caddell of clean slate. Yet over 50 years, the credit reporting Caddell and Chapman; as well percent of the time, credit agencies have refused to action lawsuit against Trans- as attorneys Leonard Bennett, reporting giants Experian, address the problem. Union and Equifax, and is also Equifax, and TransUnion co-counsel in a separate suit Cynthia Chapman, Matt Erausquin, Charles Juntikka, continue to issue credit reports “Millions of consumers have against Experian. A compet- showing discharged debts as ing class action was filed Ian Lyngklip, George Nino, still due and owing. against TransUnion and Mitchell Toups and Daniel “Millions of consumers Equifax, and it resulted in a Wolf. “This type of error on a have been effectively proposed nationwide class settlement. Earlier this year, consumer’s credit report has denied the fresh start Get your copy of Outlook on serious consequences,” said the court denied preliminary your computer weeks ahead Charles Delbaum, an attorney promised by the approval to the proposed of anyone else! at NCLC who is working on the bankruptcy laws.” settlement based on objections Email cases. “First he gets hit with raised by a team of attorneys Charles Delbaum, NCLC attorney [email protected] negative marks for the bank- including, among others, and put “Outlook ruptcy. Then he is further Stuart Rossman and Charles subscription” in the penalized by having the old been effectively denied the Delbaum of NCLC. subject line. debt, which he no longer owes, fresh start promised by the  It’s that quick! still listed on his report. It bankruptcy laws,” said The court criticized both the means having to pay more for a Delbaum. “Inaccurate record- proposed economic relief and Outlook loan or for insurance, and can ing of discharged debts on the settlement process. It also make it harder to find a job or credit reports has lowered their concluded that although the by Email rent an apartment.” credit scores and made it much injunctive relief agreed to by the parties would have been a More convenient harder for them to rebuild and than ever! NCLC’s lawsuits describe how re-establish their credit. The small improvement for some www.NCLC.org Fall 07 OUTLOOK Page 3 Girard Gibbs NCLC Honored with NLIEC Award Directs Cy The National Low Income said, “Through the tireless Energy Consortium honored efforts of the NCLC, our Pres to NCLC NCLC with its 2007 NLIEC nation’s most vulnerable Achievement Award in energy consumers are ensured Upon the application of plain- recognition of the Center’s of having a positive voice tiffs’ counsel Girard Gibbs in consistent leadership in speaking up on their behalf.” San Francisco, a California championing low-income Superior Court awarded a issues. NCLC’ energy advocates

$201,857 cy pres award to Eric H. Gibbs has served as court- include Olivia Wein-also a NCLC as part of a settlement appointed lead counsel, class counsel Speaking at NLIEC’s June member of NLIEC’s board of of Paul v. HCI Direct Inc., a and liaison counsel in numerous con- conference in Nashville, directors, John Howat, and sumer class actions throughout the consumer class action case. country. He has successfully prose- NLIEC chair Cindy Datig Charles Harak. cuted over 40 consumer class action matters, including cases involving “We are thrilled that the defective products, telecommunications, $100,000 Cy Pres to Help Superior Court approved Eric credit cards, unfair competition, truth-in- Gibbs’ request that NCLC lending, and credit repair under both state and federal consumer protection receive such a generous Hurricane Victims statutes. award,” said NCLC’s execu- Bennett’s Cy Pres Aids trainings that will address home improvement, preda- tive director, Willard P. settlement consisting of Victims of Katrina Ogburn. injunctive relief and a cash tory lending, and foreclosure fund of up to $9,000,000. A and Rita rescue scams. Individual “...NCLC was a perfect final fairness hearing was held Attorney Leonard A. Bennett case consultations will also has directed a cy pres award to be provided to advocates in recipient for a cy pres and the court approved the settlement as fair, reasonable, NCLC of $100,000 to help the Gulf. in this case. No other and adequate to the class. victims of Hurricanes Katrina organization does and Rita. The cy pres resulted The award will also be used from a settlement agreement more to fight abusive “Eric has secured a wonderful to help match the challenge victory for consumers,” said in the class action Linares v. First grant issued by the Sandler practices targeted at Ogburn. “We will use these Equity Card Corporation. Family Supporting Founda- low-income, vulner- funds to protect consumers tion. able consumers.” from similarly exploitive “Two years after the disaster, Gulf residents and evacuees Bennett has been in private Eric Gibbs schemes.” are still facing enormous practice since 1998 in financial and personal The class action was filed on According to Gibbs, the Newport News, Virginia. His challenges,” said Willard P. behalf of consumers who settlement provided refunds for practice is focused on the Ogburn, executive director of responded to an offer for free former and current customers, representation of consumers. NCLC. “We are incredibly Silkie-brand hosiery from addressed the company’s He has litigated cases grateful to Len for all that he HCI Direct, Inc. The lawsuit marketing practices, and throughout the country and did to direct us this cy pres. alleged that HCI failed to stopped all debt collection is currently involved in cases The need for help with adequately disclose the activity, among other benefits. throughout Virginia and in consumer problems is still terms and conditions of its California, North Carolina, acute and these funds will continuity sales program and “I always thought NCLC was a Maryland, Michigan, Ohio, allow us to make a real billed customers for hosiery perfect recipient for a cy pres in Connecticut, Pennsylvania, difference.” that they did not order. this case,” said Gibbs. “No Rhode Island, and Arizona. other organization does more to He is also a contributing Under the direction of After the case was certified fight abusive practices targeted author to NCLC’s practice attorney Alys Cohen, NCLC as a class action in December at low-income, vulnerable manual “Fair Credit Report- plans to hold regional 2005, the parties reached a consumers.” ing” (2006). Fall 07 OUTLOOK Page 4 www.NCLC.org Kellogg Taps NCLC to Join in National Rural Network Five-Year Initiative to Build Prosperous, Sustainable Rural Communities NCLC has received a $100,000 asked us to participate grant from the W.K. Kellogg in this unique project,” Staff attorneys Olivia Wein (center) and John Van Alst (right), co-directors of NCLC’s Rural Foundation to take part in the said Olivia Wein who Initiative, discuss plans for the new project with Lauren Saunders (left), managing attorney of our Foundation’s Rural People, is co-director of work Washington, D.C. office. Rural Policy Initiative. With on the grant with John Van gain access to fair and afford- Kellogg has divided grantees the goal of producing healthy, Alst. “As a five-year initiative, able utilities, home mortgages, into six rural policy networks: sustainable rural communities it will give us the time to build car loans, and other important National Organizations (of with widely shared economic strong relationships with a consumer financial services. In which NCLC is a part), prosperity, the Initiative is broad network of organizations May, Wein and Van Alst Central Appalachia, the Mid building a nationwide network working in rural communities.” traveled to Nebraska City, South, the Great Plains, the of rural advocates and organiza- Nebraska for a week-long peer Southwest, and an At-Large tions. According to Wein, one of learning session with scores of group. NCLC’s top priorities is to help other local, regional, and “We’re thrilled that Kellogg low-income rural communities national organizations. Energy Costs Threaten Elder Independent Living

People over 65 are the fastest ways to enhance elder access to have also more than doubled service harsh weather and in growing segment of the U.S. vital energy and utility services. and home heating oil prices in cases of serious illness. He also population. This demographic It concludes that the energy the Northeast have increased by decried onerous late fees and shift poses many challenges, security needs of lower-income close to 150 percent. security deposit requirements including the need to help elders require particular atten- that utility companies impose elders age in their own homes. tion, since these households Elder finances are further on low-income customers. But a new NCLC report reveals must devote a greater propor- strained by the type of appli- that the option of living indep- tion of income to basic energy ances they use. “Our report “The burden of energy costs endently is increasingly at risk and utility service than for their found that low-income elder undermines home energy because of the extraordinary higher-income counterparts. households are more likely to security and, as a result, the burden of soaring energy costs. use old, inefficient energy- ability of many elders to Funded by a grant from the consuming appliances and remain safely in their homes,” “Home Energy Costs: The New Borchard Foundation Center on heating equipment,” said said Howat. “If we’re serious Threat to Community Inde- Law and Aging, the report Howat. “In fact, poor elder about supporting independent, pendence and the National charts the dramatic rise in households are nearly twice as community living, policy- Movement In Support of Aging energy costs and its effect on likely as non-poor elder makers must expand energy in Place,” written by John elder finances. It reveals that households to use a refrigerator efficiency and payment assist- Howat of NCLC and Philene in the past 10 years, natural gas that is over 20 years old.” ance programs and enhance Taormina of AARP, analyzes prices in the U.S. have more consumer protections needed the severity of the growing than doubled. Propane prices According to Howat, elders to ensure access to vital home energy crisis, and suggests in the Midwest and South must be protected from losing energy and utility services.” www.NCLC.org Fall 07 OUTLOOK Page 5 focus on these and other consumer issues, support for Consumer Issues Are Hot on consumers is not a partisan issue. “We have friends and the Congressional Agenda foes on both sides of the aisle,” Saunders said. “Although Democrats tend to be more and the Senate have held other things, would cap penalty Congress Has New supportive of consumers, we several hearings on problems in rates at 7 percentage points have important Republican Awareness of Need the subprime mortgage market above the base rate. Several allies, and the financial and bills have been introduced other bills have also been to Protect Consumers industry contributes heavily to by Senators Charles Schumer introduced. The attention has and has a lot of influence with from Financial Abuse (D-NY) and Jack Reed (D-RI), already convinced some banks both Republicans and Demo- and Representative Keith to modify their practices. The change in control in crats.” Ellison (D-MN). Congress Congress, coupled with the has focused on the growing A bill by Senator Chuck foreclosure crisis, has brought Whether any of these efforts practice of unaffordable loans; renewed attention to consumer will actually result in new laws new products such as explod- issues on Capitol Hill. Since “...the new atmosphere remains to be seen. Both ing adjustable-rate mortgages the beginning of the year, Senate Banking Committee that are inappropriate for many has definitely raised Congress has held several Chair Chris Dodd (D-CT) and borrowers; and help for awareness in Washing- hearings on consumer con- House Financial Services hundreds of thousands of cerns, including mortgage ton and helped educate Committee Chair Barney Frank homeowners facing foreclosure. lending, credit cards, manda- many legislators about (D-MA) have been reluctant to tory arbitration, abusive introduce legislation in the At several hearings on credit the importance of con- overdraft fees, credit reporting, areas discussed above, though cards, legislators from both sumer issues to their preemption of state laws, and both have held hearings and parties have criticized abusive inadequate enforcement of constituents.” have berated the federal and astronomical penalty fees consumer protection laws by agencies for not doing more to and rates, “any time any Lauren Saunders federal banking agencies. protect consumers. Both have reason” interest rate increases, NCLC’s Washington and also indicated that legislation and the bank practice of Grassley (R-IA) that would ban Boston staffs are often in the may be in the works. applying payments first to the mandatory arbitration clauses thick of it, testifying before balance carrying the lowest in contracts with poultry and congressional committees and livestock farmers has passed an “Even if no significant legisla- responding to requests for Agriculture subcommittee and tion passes this year,” Saunders information on the concerns of “In the past, our work is expected to be heard by the said, “the new atmosphere has low-income consumers and the was almost entirely full committee shortly. Last definitely raised awareness in likely effect on them of pro- defensive. This year, year, Congress banned such Washington and helped posed changes. all of our efforts are clauses in loans to military educate many legislators about service members. Representa- the importance of consumer “The change has been remark- directed towards tive Hank Johnson (D-GA) just issues to their constituents.” able,” said Lauren Saunders, improving protections introduced a bill to ban managing attorney of NCLC’s for consumers.” mandatory arbitration clauses Washington, D.C. office. “In Lauren Saunders, managing attorney, in all consumer contracts, and Congressional Testimony the past, our work was almost NCLC Washington office a House Judiciary subcommit- Debt Collection Horror Stories entirely defensive. This year, tee held a hearing on arbitra- NCLC Advocacy Reports all of our efforts are directed interest rate, among other tion abuses. Consumer Rights Conference towards improving protections issues. Senator Carl Levin (D- and a whole lot more for consumers.” MI) has helped especially to Although the Democrats’ new focus attention on the issue leadership role in Congress has www.NCLC.org For example, both the House and has a bill that, among been a major factor in the new

Fall 07 OUTLOOK Page 6 www.NCLC.org tion clauses. “Credit card companies push debt on people NCLC Fights for Consumer Rights without caring about whether Error-Filled Credit ance efficiency standards, without regard to the act’s 36 folks can afford to pay it back,” Reports Must Be Fixed particularly for boilers and percent interest rate cap. said Cohen. “The companies furnaces that tend to be older profit either way, but many Chi Chi Wu, NCLC staff and performing below their The Pentagon’s proposal limits Americans are being buried attorney, testified before the rated efficiency. He also noted the act to payday, auto title, under a mountain of debt. ” House Committee on Finan- that most low-income house- and refund anticipation loans, cial Services in June. Her holds are renters and typically and defines those so narrowly 30 Years Later, Debt testimony highlighted credit do not decide when to replace that many similarly structured Collection Horrors report inaccuracies, such as aging appliances. Property high-cost products already on Continue files mixing the ident-ities of owners will often install the market will not be subject Marking 30 years since the Fair consumers, stale infor-mation, cheaper and less efficient to the 36 percent cap. Debt Collection Practices Act identity theft, and other appliances because the was passed, the Federal Trade problems. tenants, not the owners, bear “We just can’t allow predatory Commission solicited com- the higher energy costs. lenders to ignore these Wu was blunt in her criticism borrower protections, espe- ments on the state of debt collection. NCLC and the of the nation’s giant credit “Congress and DOE should be cially the interest rate cap,” National Association of Cons- reporting agencies. “The taking an aggressive approach said NCLC’s Lauren Saunders. umer Advocates submitted American credit reporting when it comes to setting “A 36 percent cap not only comments which exposed the system continues to be efficiency standards for boilers, stops price gouging by loan debt collection industry’s plagued by errors, and its furnaces, and other major sharks, it stops loan flipping practice of pursuing consumers safety net mechanism to appliances,” urged Harak. too. Predatory lenders just correct those errors is broken,” don’t find it worth their while even when shown that they have she said. “The CRAs have the NCLC has been urging DOE to to target military families at 36 the wrong person or the debt ability to address these errors adopt a 90 percent AFUE percent, though legitimate has been paid. by revising their systems, but (annual fuel utilization businesses have no problem have chosen not to do so.” efficiency) standard for gas- operating at that limit.” “The phenomenal growth of the fired furnaces in colder states, debt buyer industry – which Wu pointed out that consum- much higher than the 80 did not exist 30 years ago – has ers should be given the right percent nationwide standard Abusive Credit Card also increased the abuses under the Fair Credit Report- proposed by DOE . Tactics Squeeze the tremendously,” said Lauren Saunders, managing attorney of ing Act to ask a judge to tell Vulnerable the CRAs and furnishers: “Fix Proposed Regs Leave NCLC’s DC office. the error on my report.” Gaping Loopholes for NCLC called on Congress to Saunders explained that debts According to Wu, “The credit Predatory Lenders end reckless and abusive reporting industry will only lending by credit card compa- that may be a decade or more improve if Congress or the NCLC and other consumer nies in testimony by Alys old are now sold in bundles to regulators take action.” groups urged the Department Cohen, NCLC staff attorney, debt buyers for pennies on the Appliance Efficiency of Defense to make significant before the Senate Permanent dollar. She said that debt Subcommittee on Investiga- buyers then file cases by the Standards Help the Poor changes to the Pentagon’s proposed regulations under the tions in March. thousands in overworked courts. On May 1, 2007, NCLC’s Military Lending Act. In Charles Harak testified on comments submitted in June, Her testimony, which received “The courts typically enter energy efficiency standards the groups criticized the widespread media coverage, default judgments even if the before the House Subcommit- proposal for leaving loopholes discussed a long list of credit collector has no proof that the tee on Energy and Air Quality. large enough for payday, auto card abuses, including junk consumer owed the debt, that Harak’s testimony stressed that title, and other predatory fees, penalty rates, universal the amount owed is legal and low-income consumers would lenders to slip through, letting default, unilateral change in correct, or that the debtor being benefit from stronger appli- them gouge military borrowers terms, and mandatory arbitra- sued is the right person.” www.NCLC.org Fall 07 OUTLOOK Page 7 NCLC Helps Foreclosure Special Project Grants

Prevention Counselors Since our last Outlook we have Olivia Wein is the project received several new grants in director. On top of working to change support of our special projects. federal mortgage policy, NCLC thanks the following U.S Administration on NCLC is helping housing funders: Aging: $150,000 to improve counselors on the front lines the quality and accessibility of the foreclosure crisis. In Energy Foundation: $150,000 of legal assistance for older cities around the country, over two years for the Appliance Americans who have been NCLC is teaching a series of Standards and Low-Income the American Dream. Written victimized by scams and substantive workshops on Energy Project, which promotes by Odette Williamson, abuses in the consumer foreclosure prevention and stronger efficiency standards for Elizabeth Renuart, and marketplace; and to reduce stopping predatory mort- residential appliances (includ- Mark Benson, it is a prac- the number of elders who fall gage lending. ing boilers and furnaces) and tical guide for counselors prey to consumer scams and advocates for policies that make assisting homeowners abuses. Odette Williamson energy and utilities more During 2007 NCLC has led threatened with foreclo- is the project director. affordable for low-income workshops in Atlanta, sure. It provides detailed households. Charles Harak Albuquerque, Boston, and advice to help advocates Consumer Protection and (project director), John Howat, Phoenix, and a training is understand and challenge Education Fund of the and Olivia Wein staff this scheduled for Washington abusive practices. It also Attorneys General project. D.C. in August. reviews ways families can ($32,286) and the National reduce expenses, increase Conference of Bankruptcy California Consumer Protec- NCLC has also released a income, and avoid loans Judges ($30,000) for the tion Foundation: $25,000 to timely new book: Foreclosure that can get them into even Bankruptcy Relief Project, fight for significant improve- Prevention Counseling: Preserving more trouble. which educates lawyers about ments to the Universal Lifeline the new bankruptcy Act and Telephone Service program in offers innovative solutions for California and to prevent the NCLC Calls on Congress the challenges that attorneys Federal Communications will face when representing Commission from undermining their clients. John Rao is and FRB for Action on state protections against unfair project director. Foreclosure Crisis telecommunication practices. and prohibiting “stated Fueled by reckless and preda- in the subprime mortgage In addition to pressing for income” or “low doc” loans. tory lending in the subprime market. “For starters, the Congressional action, NCLC mortgage industry, a record mortgage industry must be is calling on the Federal number of homeowners are required to underwrite Reserve Board to use its “This is a crisis that losing their homes to foreclo- subprime mortgage loans to rulemaking authority under demands sure. Over 1 million foreclosures ensure that the homeowner the Home Ownership and immediate action.” were recorded in 2006, and a can afford the payments,” Equity Protection Act Alys Cohen, NCLC attorney higher total is expected for 2007. said Alys Cohen, an NCLC (HOEPA) to protect consum- attorney. “Lenders should be ers. In a joint letter, the “Congress has already given the A flurry of hearings has been required to verify the nation’s leading consumer Fed clear authority to ban held on Capitol Hill in recent borrower’s income and should groups implore the Fed to act unfair or deceptive acts and months, but it remains unclear provide flexible arrangements on a variety of fronts, includ- practices in home mortgage what Congress or federal to help borrowers who are in ing banning prepayment transactions,” said Cohen. regulators will do to end the default to avoid foreclosure.” penalties, requiring escrow- “This is a crisis that demands widespread, abusive practices ing for taxes and insurance, immediate action.” Fall 07 OUTLOOK Page 8 www.NCLC.org Instructive Energizing Inspiring Cy Pres To Benefit Low-Income

If you’re interested in Consumers in Montana consumer law, you don’t award will be used to help want to miss this NCLC has received a $100,000 cy informative NCLC pres from a class action settle- “They labored for seven match the challenge grant conference. ment in Wombold v. Associates years against huge issued by the Sandler Family Washington, D.C. Financial Services Co. The cy pres odds and giant law Supporting Foundation. November 8-11 distribution was ordered by firms. And they did a District Court Judge Julie superb job ...” Boland said he was delighted Macek, based on the recommen- to have the award go to NCLC. Willard P. Ogburn, executive director CONSUMER dation of class counsel Thomas “It’s a wonderful opportunity RIGHTS E. Boland of Great Falls, to put NCLC’s unmatched Montana. Consumer Loan Act did not consumer law expertise to use LITIGATION allow non-bank lenders like for the benefit of low-income CONFERENCE NCLC’s Will Ogburn expressed Associates to charge points or people in Montana. I’m very his gratitude to Boland and his origination fees on real estate pleased to see this award go to former co-counsel Jerry Lynch loans.” such a top-notch organiza- for their work on the case. “They tion,” he said. labored for seven years against NCLC will use the award to huge odds and giant law firms. help low-income consumers in For information on how you can craft And they did a superb job in Montana, in partnership with a cy pres for NCLC, contact Rich For more information getting the Montana Supreme the Montana Legal Services Dubois or Willard P. Ogburn at 617 www.NCLC.org Court to hold that the state’s Association. In addition, the 542-8010. We Appreciate Your Generous Support

NCLC is fortunate to receive funding from many foundations, corporations, and government agencies. We thank the following for their generous support over the past year

AARP Ford Foundation Action Inc. Foundation for Credit Education American College of Bankruptcy Freddie Mac Borchard Foundation Center on Law and Aging Institute for College Access and Success Boston Bar Foundation W.K. Kellogg Foundation Boston Foundation Massachusetts Legal Assistance Corporation California Consumer Protection Foundation George H. and Jane A. Mifflin Memorial Fund Consumer Protection and Education Fund of the Attorneys National Conference of Bankruptcy Judges Endowment for General Education Annie E. Casey Foundation Proskauer Rose LLP CFED Retirement Research Foundation City of Boston Sandler Family Supporting Foundation Energy Foundation John H. and H. Naomi Tomfohrde Foundation Fannie Mae Foundation U.S. Administration on Aging Paul and Phyllis Fireman Charitable Foundation U.S. Department of Housing and Urban Development www.NCLC.org Fall 07 OUTLOOK Page 9 Thank You! Our thanks to those individuals, firms, and organizations listed below who have provided generous support in the past year for NCLC’s annual advocacy initiatives and conferences. Asterisks indicate those NCLC supporters who have donated to the Center for at least the last five years - our special thanks to them. Donors who have supported our Building Campaign will be listed in our Campaign Update available later this fall. Leadership Circle David F. Black* Lynn Drysdale Ellen Holland Keller Anne Marie Regan $5,000+ J. Thomas Black* Barry R. Eichen John R. Keller Charles N. Riley Timothy E. Eble* F. Paul Bland Jr. Marley Ford Eiger* Susan N. Kelly* Anthony Roberti Proskauer Rose LLP William H. Blessing Kenneth J. Eisner Ronald J. Kim Charles Roedersheimer Brian L. Boger Khalid Elhassen Eugene Kimmelman Toby Rothschild Benefactors Robert F. Brennan Kathleen Engel James A. Kowalski Richard J. Rubin* $2,500-4,999 William J. Brennan Jr. Peter Engel Robert Krughoff Robert and Sloan Sable* Michael Malakoff* Alana Brenner* David and Marian Entin Michelle Ku Ernest L. Sarason* Dolores Silva Smith* Mark B. Brenner John L. Fallat Norman K. K. Lau* Cathy Schoen and Thomas A. Tarter* Jim Breslauer N. Victor Farah James F. Ledford Lawrence Zacharias Carol McLean Brewer and Joanne S. Faulkner* Irene Leech* Scott Schofield Advocates Andrew J. Ogilvie Cheryl D. Feuerman* David A. Leen and Richard R. Schwabe $1,000-2,499 Stephen Brobeck Michael G. Figgins Sheila M. O’Sullivan Myrna Serrano James L. Brown* John G. Brooks Gary I. Finklea Gary Leshaw* Gary D. Sesser Sheldon V. Burman Paul A. Brooks* Frank Fischer Seth R. Lesser Bonnie S. Shane* Anthony B. Ching* Matthew Brownfield James B. Fishman Roberta Leviton* Marshall S. Shapo* Hemenway & Barnes* Barbara E. Buckley Mary Fons* Mark H. Leymaster Mary B. Spector Jean B. Hill Jessica Budnitz Wood R. Foster Jr. Reginald C. Lindsay Thomas H. Stanton* Robert B. Hinsley Mark E. Budnitz* Jean Ann Fox Bruce Lippman Andrea Bopp Stark Jerome S. Lamet* Bruce A. Burke Henry A. Freedman Chris Luzzie Kevin Stein Christopher LeFebvre Constance P. Carden Ellen G. Friedman Sue Lyon Mark H. Steinbach* Arthur D. Levy Case, DiGiamberardino Andrew J. Garcia Peter L. Maier Patricia Stelzner Michael J. McCrann & Lutz Robin L. Godfrey Mont I. Martin Albert Sterman NGRID Penny Hays Cauley Dennis Goldstein Scott Maurer* James A. Sturdevant Augustin H. Parker Gail E. Chester* Sharon Grace Mallam J. Maynard Stephen L. Swann David J. Philipps Daniel E. Claggett Susan M. Gray Ed Mierzwinski Michael Tankersley James Shedden* Clark County Legal Louis M. Green Paul G. Minoletti Gerald J. Thain James C. Sturdevant* Services* Francis B. Greene Carl J. Mollica Victor S. Thomas Tuscon Electric Power Donald F. Clifford Jr.* Michael Greenfield* Michael J.S. Moriyama Vance P. Truman Charles W. Cobb Robert Neil Grossbart Michael A. Mullett John N. Ukegbu* Good Friends $1-999 Andrew Cogdell* Kathryn Harlow Robert W. Murphy Paul M. Uyehara* AARP Foundation Barry Cohen* Paul A. Herman Gary H. Nash* William T. Vukowich Litigation* Gwendolyn Connolly Dorothy Herrera Settlage Michael O. Nelson G. Ray Warner Anonymous Michael J. Cox Gail Hillebrand Philip Nowicki* Kevin A. Waterbury Harold I. Abramson John J. Curtin Jr. Caswell O. Hobbs Lowell C. Paul* Thomas W. Weeks David C. Alford Bradford L. Daley Steven Hollimon Donald E. Petersen Carol and Jack Werner Doug Antonik David Dawson Janet K. Hong Mark Pettit Alan M. White Elizabeth Arleo Deborah M. DeMack Robert L. Hunter* Richard A. Pizzo Nick Wooten Roland Arteaga Ishbel Dickens Cheryl L. Hystad Stan Platke Michael C. Worsham Roy E. Barnes Nicholas J. DiNardo John R. Jones Raphael Podolsky* Peter S. Wright Jr. John W. Barrett Thomas Domonoske* Katherine J. Jones Mary Dee Pridgen* James Youngerman Joseph R. Bazan Karen Smith Drew DeVonna Joy* Kenneth D. Quat George J. Zweibel Steven N. Berk Peter Drymalski* Richard S. Kanter Salvador C. Ramirez Fall 07 OUTLOOK Page 10 www.NCLC.org Svetlana Ladan, Operations Manager Dear Friends: Denise Lisio, Supervising Legal Editor As you can see from Outlook’s NCLC Staff Deanne Loonin, Attorney NCLC annual list of NCLC donors, Ava Morgenstern, Development Partners many of you have given Assistant generously to NCLC this past John Beck, Administrative/Technical Council Willard P. Ogburn, Executive year. I sincerely thank you for Assistant Director Leadership for NCLC that. Each of your gifts - large Sarah Byrnes, Campaign Manager Debbie Parziale, Office Manager or small - has helped make for AFFIL Chair: Bryan Kemnitzer John Rao, Attorney possible our advocacy on behalf Carolyn Carter, Deputy Director for Roy E. Barnes Bernard E. Brown of low-income consumers. You Advocacy Elizabeth Renuart, Attorney James L. Brown Stuart Rossman, Director of Litigation have helped us make a differ- Alys Cohen, DC Office, Attorney Elizabeth J. Cabraser ence. Eleanna Cruz, Administrative Assistant Lauren Saunders, Managing Attorney, Sheila Canavan Suzanne Cutler, Development DC Office Mark A. Chavez William H. Crowder I want to especially thank and Director Margot Saunders, Of Counsel Michael D. Donovan recognize those we’re calling Eric Secoy, Legal Editor Charles Delbaum, Attorney Timothy E. Eble our Triple A - or Again And Jen Douglas, Loan Repository Project Jon Sheldon, Attorney Cary L. Flitter Again - Donors. We’ve put an Richard DuBois, Development Stacy Smith, Customer Services Robert S. Green asterisk by their names on the Director Manager Kathleen E. Keest William M. Krieg list to the left. Shannon Halbrook, Publisher’s Mallory SoRelle, Research Assistant Robert I. Lax Dorothy Tan, Legal Editor Assistant Arthur D. Levy These generous contributors Charles Harak, Attorney Diane Thompson, Of Counsel Seth R. Lesser have given NCLC annual Megan Harrington, Publications Tara Twomey, Of Counsel Michael P. Malakoff donations for at least the last Niall P. McCarthy Assistant John Van Alst, DC Office, Attorney Daniel J.Mulligan five years. Many began Olivia Wein, DC Office, Attorney Robert Hobbs, Deputy Director John T. Murray supporting NCLC so far back John Howat, Energy Advocate Shirlron Williams, DC Office, John Roddy that our current computer Danijela Jankovic, Assistant to Office Administrator Howard Rothbloom system can’t even give us an James C. Sturdevant Director of Finance Odette Williamson, Attorney accurate record! Rick Jurgens, Consumer Advocate Donna Wong, Publications Director Chi Chi Wu, Attorney We appreciate each of your Margaret Kohler, Director of Finance gifts- whether it’s your first or Outlook your 10th - because each one OUTLOOK, a publication of helps fund important NCLC the National Consumer Law advocacy efforts that, for lack of HELP Center, is intended to inform our supporters about the resources, might otherwise have Center’s advocacy and to go undone. And your gifts NCLC make a difference fundraising activities. also encourage us in our work. Each time you make a gift, ___I enclose a check for $______For additional information on ___I pledge a gift of $______payable over ____ years. NCLC or to be placed on the you’re telling us that you think ___Please charge $______to Visa/Mastercard OUTLOOK email subscription what we do is important and #______expiration date______list, write or email: that you value our work. 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See you in Washington at our Consumer Rights Litigation Conference, November 8-11, 2007

expression of the huge econ- NCLC Reports Call for Change omic divide we have based on race in this country,” noted Chi Continued from page 1 bankruptcy law have so far failed The report also found prob- Chi Wu, NCLC staff attorney utilities use payday lenders as to deliver measurable benefits, lems related to the accessibil- and primary author. “As such, an inexpensive way to provide according to Deanne Loonin and ity and affordability of the the use of these scores in insur- locations for customers to pay John Rao, principal authors of a counseling, as well as the ance perpetuates and reinforces utility bills in person. Payday new NCLC study. “New Burdens effectiveness and accuracy of this racial wealth divide.” lenders, in turn, covet the traffic but Few Benefits: An Examina- the information provided. of potential customers for their tion of the Bankruptcy Counsel- The NCLC report includes an ultra-high-cost loans. ing and Education Require- A Critical Look at Insurance analysis by Birny Birnbaum of ments in Massachusetts” Credit Scoring the Center for Economic Utilities direct customers to questions the value of making A new NCLC report calls on Justice on how insurance credit more than 650 licensed payday consumers spend time and states to outlaw the use of scores could cost consumers up loan stores. Other payday money on counseling before credit scores in setting insur- to $67 billion annually. Accord- lenders so value exposure to filing for bankruptcy when cred- ance rates. “Credit Scoring ing to Birnbaum, “Insurance susceptible bill payers that itors and agencies can offer no and Insurance: Costing credit scoring is truly 21st they bypass licensing arrange- real alternatives to bankruptcy. Consumers Billions and Per- ments and offer unauthorized petuating the Economic Racial Century redlining. Contrary to insurer claims that insurance utility payment services. “Consumers can be counseled Divide” documents many insur- scoring is simply about and educated, but at the end of ance credit scoring problems accurate risk assessment, Bankruptcy Counseling Must the day, if there are no good and summarizes numerous insurers’ use of consumer credit Be Improved alternatives to bankruptcy, there studies indicating enormous information has led to huge New counseling and financial isn’t much value to the effort,” racial disparities created by increases in insurer profits and education requirements im- said Loonin. credit scoring. “Credit scores posed on debtors by the 2005 are essentially a numerical excessive rates.” Fall 07 OUTLOOK Page 12 www.NCLC.org