Kerry Press Release: Kerry Unveils Plan to Help Middle-Class Families Save

[Skinner]

For Immediate Release
August 27, 2004

Kerry Unveils Plan to Help Middle-Class Families Save and Get Ahead

Daly City, CA – In a town hall meeting with middle-class families Friday, Democratic presidential nominee John Kerry unveiled a series of new proposals to ensure fairness in our economy by helping hardworking families save for the future and get ahead. Kerry’s new proposals, which will curb unfair and deceptive lending practices, represent another example of the fundamental choice facing voters in this election: four more years of an administration that puts narrow interests ahead of middle-class families or the Kerry-Edwards plan that strengthens and expands the middle class.

In a show of support for the proposals Kerry unveiled today, seven state Attorneys General released a statement commending Kerry for his “commitment to protecting America’s consumers” and recognizing the need for help after nearly four years of an “administration (that) has too often sided against families who need help and protection.”

“In this country, we respect hard work, we value our families, and we make sure everyone has a chance to get ahead,” Kerry said. “The good news is that we can do something about unfair and deceptive lending practices and put billions of dollars back into the pockets of hardworking families.”

Responsible lending plays an essential role in our society, and borrowers must take responsibility as well. But ripping off families is wrong.

As yesterday’s report from the Census Bureau revealed, middle-class families are earning $1,500 less than in 2000, and as a result, it comes as no surprise that families experience debt, foreclosures and bankruptcies at record levels.

Making matters worse, one in nine families falls victim to consumer fraud. While many lenders are responsible, some credit card companies and mortgage lenders are taking advantage of families who are already earning less in the Bush economy.

“When you earn less and you pay more, what happens? You go into debt,” Kerry said. “Families today face record levels of debt—not because they’re spending beyond their means, but because they can’t pay their bills without putting them on their credit cards.”

Kerry today singled out a number of abuses families face at the hands of irresponsible lenders. For instance, under new practices by some credit card companies, consumers with years of perfect payments can see their rates on their existing debt skyrocket to a “penalty rate” when they miss a payment to a different company. Similarly, some mortgage companies use deceptive terms, fees and penalties to trap families in cycles of debt. Too often, it is seniors, minorities and military families who are the target of these irresponsible lenders.

For four years, Bush has stood on the opposite side of families. The Bush administration has supported regulations that prevent states from cracking down on predatory lending. It joined with credit card companies in seeking to overturn state regulations that would require them to disclose the consequences of only making minimum payments. It has also sought to relax regulations on banks that lend to families and businesses in low- and moderate-income communities.

“With middle-class families so squeezed by declining incomes and skyrocketing costs for health care, energy, and college tuition, it is more important than ever that we ensure our economy works for everyone,” Kerry said. “For four years, George Bush has put narrow interests first while hard working families pay the price. John Edwards and I will put America’s families first. By putting in place strong consumer protections that hold lenders accountable, we can put billions of dollars back into the pockets of middle-class families struggling to make ends meet, and help families climb out of debt and build a better life for their children.”

John Kerry and John Edwards offer families a different choice than George W. Bush. Instead of standing with big corporations, they will stand with families who play by the rules and are trying to get ahead. They will stop lending rip offs by:

· Requiring Credit Card Companies to Play Fair. Kerry and Edwards believe that credit cards are a critical source of loans for American families, and they recognize that interest rates can and should reflect risk. They will require credit card companies to abide by the same standards of fairness as other lenders. Companies will not be able to double interest rates on the existing debt of a perfect customer based on one missed or disputed payment to a different company. They will be required to inform customers, in an easy-to-read box on each bill, how much time and money will be required to pay off a bill with only minimum payments. And Kerry and Edwards will require truth-in-advertising—like clear statements when “teaser” rates will disappear.

· Stopping Abusive Mortgage Lending. At a time when abusive mortgage lending tricks cost families $9 billion per year, Kerry and Edwards support strong national legislation to stop the unfair practices—like high prepayment penalties that trap borrowers in bad terms, “balloon payments” that inevitably lead to more expensive refinancing or foreclosure, and mandatory insurance borrowers don’t need. Kerry and Edwards will increase enforcement of laws requiring fairness in lending.

· Protecting Military Families from Unfair Practices. Kerry and Edwards will institute new protections against abusive short-term lending and new disclosure requirements for insurance products sold directly to servicemen on bases.

“This is not how we do business in America,” Kerry said. “We don’t make money by tricking or deceiving our fellow Americans or slamming families with higher interest rates just because you can. In this country, we respect hard work, we value our families, and we make sure everyone has a chance to get ahead. And when I’m President we will.”

-30-

Statement from State Attorneys General on Kerry-Edwards Consumer Protection Plan
August 27, 2004

We commend Senator Kerry for his commitment to protecting America's consumers against deceptive and abusive lending practices. We know how important credit is for America's families. But every day, our offices hear heartbreaking stories about how Americans who work hard and take responsibility are cheated out of their savings by unfair and deceptive practices. We fight hard against these practices, and we are proud that states returned half a billion dollars to consumers in 2002.

But states need a strong partner in Washington, and under George Bush we don't have one. The Bush Administration has too often sided against families who need help and protection. Senator Kerry has made clear that he will stand with families, not against them. We applaud Senator Kerry's commitment to defending hard-working families.

Signed by the following Attorneys General:


Terry Goddard, Arizona Attorney General
Mike Hatch, Minnesota Attorney General
Peg Lautenschlager, Wisconsin Attorney General
Bill Lockyer, California Attorney General
Patricia Madrid, New Mexico Attorney General
Tom Miller, Iowa Attorney General
Elliot Spitzer, New York Attorney General

VALUING AMERICANS’ HARD-EARNED MONEY BY PROTECTING IT FROM ABUSIVE FINANCIAL DEALS

John Kerry and John Edwards believe that families who work hard should be able to build a better future for their children. But in George Bush’s economy, these families are earning less and paying more for health care, child care, and gasoline. As families go deeper into debt just to stay afloat, their pockets are sometimes picked by deceptive and abusive credit card and mortgage practices. George W. Bush has stood with the big corporations that engage in these practices; John Kerry and John Edwards will stand with the hard-working families by providing strong new consumer protections—stopping fast dealing, requiring honest advertising, and cracking down on fraud. Responsible lending plays an essential role in our society, and borrowers must take responsibility as well. But ripping off families is wrong, and the Kerry-Edwards plan will stop it.

The Kerry-Edwards Plan Will:

Require Credit Card Companies to Play Fair: Unlike other lenders, some credit card companies routinely change the terms of a loan after the money is borrowed, even though the consumers are making all of their loan payments on time. Companies refuse to disclose basic terms of the loan, like the full cost of making only the minimum payments required by the lender. Loan practices can and must reflect risk, but Kerry and Edwards will require credit card companies to abide by the same standards of fairness as other consumer lenders. Companies will not be able to double interest rates on the existing debt of a perfect customer based on one missed or disputed payment to a different company. Companies will be required to inform customers, in an easy-to-read box on each bill, how much time and money will be required to pay off a bill with only minimum payments. And Kerry and Edwards will require truth-in-advertising—like clear statements when “teaser” rates will disappear.

Stop Abusive Mortgage Lending. At a time when abusive mortgage lending tricks cost families $9 billion per year, Kerry and Edwards support strong national legislation to stop the unfair practices—like high prepayment penalties that trap borrowers in bad terms, “balloon payments” that inevitably lead to more expensive refinancing or foreclosure, and mandatory insurance that borrowers don’t need. Kerry and Edwards will increase enforcement of laws requiring fairness in lending.

Protect Military Families from Unfair Practices. Today, military families are targeted by short-term lenders that can put families on a “debt treadmill,” and by insurance agents who pretend to be financial counselors and offer products so worthless they are no longer sold on the open market. Kerry and Edwards will institute new protections against abusive short-term lending and new disclosure requirements for insurance products sold directly to servicemen on bases.


UNFAIR FINANCIAL DEALS ARE SQUEEZING MIDDLE CLASS FAMILIES

One in Nine Families Hit by Fraud. According to a recent survey by the Federal Trade Commission, nearly 25 million adults—11.2 percent of the adult population—were victims of one or more consumer frauds in the last year. Three of the top four practices were advance fee loan schemes, credit card insurance, and credit repair. (FTC, 8/4/04)

Credit Card Companies Have Increased Their Fee and Interest Income. Americans paid nearly $20 billion more in interest and fees in 2003 than in 2000. Today, about 40 percent of borrowers make only minimum payments on their credit card bills, and only about one-third pay their bills off in full each month. (CardWeb.com, 2004; Federal Reserve, 2002; Demos, 2003; Consumer Reports, 5/04; CBS Marketwatch, 10/3/01)

Companies Change Rates Even for Those Who Always Pay on Time. Under a new practice, even consumers with years of perfect payment records on a credit card can see their rates skyrocket to a “penalty rate,” which is now often 29.99% and can reach as high as 48% -- even when the cause may be one missed payment on a different bill. According to a recent survey, the majority of credit card companies still do not engage in any rate increases based on conduct with other creditors, but a growing minority of companies do so. (Card News, 6/23/04)

Abusive Mortgage Lending Costs Billions. While subprime loans can be a valuable service for individuals with poor credit histories, abusive mortgage lenders use deceptive terms, fees, and penalties to trap families. Studies have placed the cost of these loans at up to $9 billion per year. (New York Times, 12/11/03; Center for Responsible Lending, 2003; HUD, 2000)

Millions Paying More Than Their Credit Scores Dictate: Half of Americans with subprime loans could qualify for conventional loans and save thousands in interest and fees, according to Franklin Raines, the CEO of Fannie Mae. Over the 30-year life of a mortgage, a typical subprime loan costs a borrower an additional $420,000. (CBS MarketWatch, 10/29/03; Warren and Tyagi)

Military Families Targeted: Lenders congregate around military bases, offering short-term loans based on a check as collateral. While emergency loans can be an important service, many payday lenders put soldiers on a debt treadmill, with fees and interest rates that far outstrip the initial value of the loan. In addition, insurance agents appearing to be endorsed by the military sell low-value products to soldiers, like life insurance benefits far more costly and less beneficial than products provided by the military itself or other insurers. At Ft. Bliss in Texas, nearly 1 in 10 soldiers has needed financial counseling due to these and other financial practices. (Associated Press, 1/17/04; InCharge Institute of America, 5/25/04; New York Times, 7/15/04)

Seniors and Minorities Targeted: Seniors are three times more likely to be targeted for high-cost subprime mortgages. Homeowners in high-income African-American neighborhoods are twice as likely as homeowners in low-income white areas to have subprime mortgage loans; Hispanics and Native Americans face similar gaps. (Center for Responsible Lending; AARP, 2001; HUD, 2000)

Earnings Drop as Costs Increase. Since George Bush took office, average family income has dropped by $1,462. Average family premiums are up $2,630; average public college tuition is up $1,207; gas prices for families are up $495; and child care costs are up more than $1,000 per child. A two-parent family making $68,000 now spends three-quarters of their income on health insurance, child care, mortgages, cars, and taxes, up from about half of income in the early 1970s. (2000 MEPS Data from AHQR projected forward using JFF data; DOE, HVEC 1994; College Board 2004; New York Times, 12/1/03; Warren & Tyagi, The Two Income Trap)

THE BOTTOM LINE: Families Face Record Debt, Foreclosures, and Bankruptcies. Household debt has been rising by 9 to 10 percent per year since the 2001 recession. Credit card debt for those carrying it is at a record level of $9,205. Foreclosures are 18% above their level three years ago, and the number of mortgages more than 90 days past due is 20% higher. Household bankruptcies have increased by 33% under George Bush to 1.63 million in 2003—a rate of one bankruptcy every 19 seconds. (Federal Reserve, Consumer Credit Historical Data; Cardweb.com; U.S. Courts Administrative Office; Mortgage Bankers Association)


JOHN KERRY AND JOHN EDWARDS’ PLAN TO HELP FAMILIES GET AHEAD

1. Crack Down on Credit Card Rip-Offs: Kerry and Edwards believe that credit cards are a critical source of loans for American families, and they recognize that interest rates can and should reflect risk. They are committed to ensuring that responsible consumers continue to gain access to credit. At the same time, they believe that companies also must be responsible and must play fair. They will:

Bar Massive Rate Hikes on Perfect Customers. Today, even consumers with years of perfect payment records on a credit card can see their rates skyrocket to a “penalty rate,” which is now often 29.99% and can reach as high as 48%, just because of a missed payment on an electric bill, a contested payment to a different company, or applications elsewhere for additional credit cards. A customer who put a $1,000 washer-dryer on a credit card at 12% is suddenly paying 29% on that $1,000, in spite of having made every payment on time, because of one missed payment to a different company. Kerry and Edwards will support regulations to bar these rate increases on the outstanding debt of perfect customers.

Require Full Disclosure About the Cost of Carrying a Balance: Four in ten Americans with credit card debt make only minimum payments, exposing them to huge interest costs. A typical American with the typical debt of $9,000 making only minimum payments at a 15% rate would need 39 years and $23,000 to pay off his debt. Many consumers are not aware of this because credit card companies—unlike other lenders—are not required to disclose all the terms of the loan to the borrower. John Kerry and John Edwards will require credit card statements to disclose the time and money required to repay a loan by making only the minimum payment each month, as well as the size of a monthly payment needed to repay the debt over three years. California passed a similar requirement, but the industry, assisted by the federal banking regulators, got the provision overturned because it was preempted by federal law.

Require Full Disclosure of Over-the-Limit Charges. Today, when customers go over their limit, companies will regularly approve the transaction and charge a fee of $35 or higher. Many customers would use a different card if they had the opportunity. Kerry and Edwards will require companies to obtain approval before charging over-the-limit fees for approved transactions. Companies could ask consumers to sign up on their bill for a service in which they will be allowed to go over the limit and be charged a fee. Or consumers could be given the opportunity to approve fees at the time of the transaction.

Require Truth-in-Advertising: Introductory rates and banner headlines regularly mislead consumers. In a “bait and switch,” reasonable consumers do not realize that they were denied the advertised rate and received a much more costly card because the difference is hidden in fine print. Kerry and Edwards will require clear, big-print disclosures of major terms. They will also require companies to notify customers before raising interest rates.

Enforce Consumer Laws: At a time when one in nine Americans has been victimized by fraud, consumer protection efforts are limited. At the Office of the Comptroller of the Currency, only 100 of 1,700 field agents focus on consumer protection. Kerry will increase enforcement of consumer protection laws. (New York Times, 6/2/03)

2. Pass a Strong National Law Against Predatory Lending: John Kerry and John Edwards oppose recent steps by the Office of the Comptroller of the Currency pre-empting strong state laws and replacing them with weak federal rules. They support strong national legislation that will, among other steps:

Limit Penalties for Early Loan Repayment: On subprime mortgages, prepayment penalties of 5 percent of the loan are common. These penalties prevent families from refinancing out of high-cost loans and make it difficult for borrowers to compare the costs of two potential loans. Kerry will limit penalties to a reasonable size and period in the life of the loan.

Limit Financing of Fees: Excessive points and fees strip homeowners of their home equity. They also encourage lenders to profit at the expense of homeowners by repeatedly refinancing loans or lending more than the borrower can repay. Kerry will limit the financing of fees and points in subprime loans. Making the loans through higher rates instead of fees makes the cost of the loan more transparent, and allows borrowers to refinance more easily when their credit improves.

Limit Balloon Payments: With balloon payments, homeowners pay interest on their mortgage but little or no principal until the end of the loan, when payment is due in full. Some borrowers refinance their homes into balloon payment plans but do not realize they are heading to an exorbitant final payment they cannot meet. Borrowers are then forced into expensive refinancing, and some lose their homes. Kerry will prohibit most balloon payments loans.

Ban Single-Premium Mortgage Insurance: Some lenders require homeowners to purchase insurance to protect lenders against default. When they require borrowers to pay one up-front premium instead of monthly premiums, borrowers end up paying excessive rates and paying for 30 years of insurance even if the person owns the house for only a few years. Kerry will ban single-premium insurance.

Enforce Fair Housing Laws: Kerry will increase HUD’s support for non-profit fair housing groups that help HUD monitor, enforce, and educate the public about the Fair Housing Act. Kerry will also make sure that the Federal Trade Commission and the Legal Services Corporations have the resources they need to help protect consumers from predatory lenders.

3. Protect Military Families:

Stop Payday Lending Abuses Around Military Bases: Kerry and Edwards support rules to ensure that where short-term lenders legally operate, consumers have strong protections against abuses, such as minimum periods for loans linked to their value, a right to repay loans in installments, and real limits on the number of loans provided per year to keep families off a treadmill they can’t escape.

Stop Insurance Company Abuses. Kerry will instruct the Pentagon to issues new rules that stop the misleading marketing of products to U.S. soldiers. If products are marketed, he will require full disclosure that insurance agents are not authorized or endorsed by the government; what the product is, such as whether it is insurance and not a mutual fund; and, in simple terms, what the real value of these products to soldiers will be.


GEORGE BUSH IS NOT ON FAMILIES’ SIDE

Bush Received A Whopping $26.5 Million from the Financial Industry. George Bush’s 2004 campaign has raked in a whopping $26,594,158 from banks, insurance companies, and real estate companies. Bush-Cheney 2000 received $3,962,277. The credit card giant MBNA was Bush’s top donor in 2000 and is Bush’s top donor for 2004 again. MBNA has paid $585,675 into the Bush campaign coffers for 2000 and 2004 combined. (Center for Responsive Politics, www.opensecrets.org )

Bush Administration Overrides State Protections Against Abusive Lending. The Office of the Comptroller of Currency (OCC), a division of the U.S. Treasury, recently ruled that state laws on predatory lending do not apply to national banks or their subsidiaries. This move preempts state laws that crack down on predatory lending and exposes consumers to abusive lending across America. The measure is opposed by all 50 governors and state attorneys general, AARP, and a broad coalition of consumer groups. As New York Attorney General Eliot Spitzer noted, "This is a continuation on the part of the Bush administration to pre-empt state enforcement in areas that are critical to ensuring civil rights and consumer rights.” North Carolina Attorney General Roy Cooper similarly called the measure “unacceptable.” (New York Times, 1/27/04; Charlotte Observer, 1/8/04)

Bush Administration Joins Credit Card Companies to Override State Disclosure Laws. California enacted legislation requiring credit card companies to disclose to borrowers the consequences of making only minimum payments, as John Kerry proposes today. The Bush Administration joined with credit card companies to seek to overturn the state regulations in court. While the Bush Administration said that the state regulations were “pre-empted” by federal law, the Administration has not supported federal laws to require national disclosures, and has supported bankruptcy “reform” instead. (Sacramento Bee, 5/10/03)

Bush Administration Moves to Relax Reinvestment Requirements for 1,100 Banks. The Community Reinvestment Act is the key federal law requiring banks to lend to families and businesses in low- and moderate-income communities. Until today, smaller institutions qualified for relaxed review under CRA only if they had less than $250 million in assets. But under the Bush Administration, the four regulatory bodies are poised to enact a proposal to raise that threshold to $1 billion. This proposal will relax review for 1,100 banks and will have a particularly negative impact on the small towns and rural areas where smaller institutions operate. (The Hill, 7/22/04), (Senators Protest Weakening Of Community Reinvestment Act Regulations, Office of Senator Paul Sarbanes, 5/18/04)

www.johnkerry.com
Paid for by Kerry-Edwards 2004, Inc.

[HFishbine]

1. Skinner, where do you get these?

I'm enjoying reading them everyday on DU, but I went looking for yesterday's about health care on JK's site and it was nowhere to be found. Might be nice to know where they are archived -- if anywhere.

[Skinner]

3. These are press releases from the campaign.

I asked to be put on their email distribution list. I just slap them up as soon as I get them. I think most of them are on the Kerry website in one form or another, either in the Press room or in the rapid response center.

[Terran]

6. And thanks for posting it

It's good to see there's an actual campaign going on beside the you-know-what controversey. <sigh>

[soothsayer]

2. Hey, cool! The man's got plans.

What a refreshing change---to see plans that involve regular ol' taxpayers, not big fat corporate welfare schemes and bazillionaires.

[kikiek]

4. Great plan and he tells us exactly what his plans are

I Love This Guy more and more everyday.

[Larkspur]

5. What's Kerry's policy towards singles, both with and without children?

As a single and child-free woman, I pay more taxes proportionally than married filing jointly. Last year, based on the tax tables alone, I paid $500 more than a married filing jointly taxpayer. That's not fair.

There are 86 million singles, with and without children, in this country, and it's time politicians pay attention to us.

[Blue_Roses]

7. and this can't some soon enough!

n/t

[fishface]

8. Whip the village idiots' ass in November...

that's the best help we could get.