Wednesday, May 15, 2013

My Consumer Financial Protection Bureau Los Angeles speech for May 15, 2013.


Credit Card Default Reparations for Consumers 2000 to 2013.

The following is a Timeline of Events that stripped Americans of fairly priced Credit Card Debt Suspension Insurance and subsequently made them fodder for Credit Card Default Verdicts with no plausible way to defend themselves in court.

Unregulated and overpriced Credit Card Debt Suspension Insurance explodes as consumer credit card debt grows.

Comptroller of the Currency slaps down the Insurance Industries desire to offer competing Debt Suspension Insurance for Credit Card Customers. The CC basically gives the credit card companies a monopoly over their own customers and offers no pricing guidelines other than suggesting the premiums cover the cost of inflicting the Credit Card Debt Suspension Insurance Program. The CC absolves the credit card companies from federal regulations for Credit Card Debt Suspension Insurance ratios of costs vs payouts. Many Credit Card Debt Suspension Insurance Policies retain 85% to 95% of every dollar collected, an obscenely large percentage that meant Credit Card Debt Suspension Insurance premiums were overpriced and unrealistic long term investments for consumers.

April 20, 2005 
After removing the most logical method for protecting a consumer's credit rating, affordable credit card debt suspension insurance, tougher Bankruptcy rules are signed into law. Americans who could not afford the monopolistic, unregulated and overpriced Credit Card Debt Suspension Insurance now have even less avenues to protect themselves from credit card defaults in times of crisis. Credit card defaults can create a cascading affect of higher and higher associated payments on a defaulted account. The penalties, fees, and interest rate hikes engulf the unprotected consumer and can eventually lead to both the loss of job opportunities based on a poor credit score and foreclosures as well.

Alessandro Machi   Page 1 of 4   

June 8th, 2005 
The Comptroller of the Currency encourages The Fed, FDIC, The Office of Thrift Supervision, and some national banks to raise monthly minimum Credit Card payments from 2% to 4% of the total due, an excellent idea but an unattainable one as it would create instant defaults for millions of americans. Offering credit card customers affordable Credit Card Debt Suspension Insurance does not appear to be a priority for the CC.

Banks get a bailout, consumers get screwed via Parallel Foreclosure.

2008 to 2011 
Chase Bank raises monthly minimum payments from 2% of the total due to 5% of the total due on over a million, low interest rate, life of the loan credit card customers, and Chase Bank offers no opt out option. The huge raise in the monthly minimum payment causes untold thousands of Chase Bank Customers with perfect payment histories to default. Chase Bank then robo signs these ambushed customers through the court system, tarnishing and then garnishing customers wages who formerly had perfect payment histories and stellar credit ratings as well.

Federal Trade Commission Annual Report: Fair Debt Collection Practices Act makes…
No mention is made that millions of credit card defaulters can't afford ridiculously overpriced debt suspension insurance. 
No mention is made that credit card companies universally refuse to accept a customer's debt instrument offering before a hardship account actually goes into default. 
No mention is made that Credit Card Companies do not reasonably disclose that a default must first be declared before any change in terms will be discussed
No mention is made that robo servers falsely report they served or subserved an alleged credit card default defendant and how this simply encourages debt collectors to shirk service law statutes knowing the judge will allow the case to go forward with a fraudulent service.

Alessandro Machi   Page 2 of 4   

No mention is made that when judges look the other way over false service practices, it reduces a defendants negotiating position against a debt collection service since the debt collector knows they can get a false service at any time. 
No mention is made that what happens BEFORE a default is declared by a credit card company should be considered by the courts. Instead judges simply ignore the credit card companies questionable tactics and policies and solely focus on whether a default actually occurred. Overwhelmingly one sided verdicts favor the credit card companies and encourage the flawed judicial process to perpetuate as is.

The Credit Card Reform Bill Act is signed into law and the Consumer Financial Protection Bureau is created to balance the Comptroller of the Currencies penchant for supporting banking interests over consumer welfare. A much needed checks and balance has been created.

The Consumer Financial Protection Bureau assesses a billion dollars in fines over Credit Card Debt Suspension Insurance Marketing Practices. The fines have nothing to do with how unfairly priced Debt Suspension Insurance premiums are, but rather how aggressively the Debt Suspension Insurance is marketed, and how difficult it is to opt out once the credit card companies have enrolled their prey.

Parallel Foreclosure is declared illegal in California.

Kamala Harris initiates a class action lawsuit against Chase Bank for their financial terrorist activities against Californians from 2008 to 2011. Chase Bank allegedly robo-signed their default cases, garnishing and levying bank accounts of formerly excellent credit rating customers. The actual monthly minimum payment increase from 2% to 5% with no opt out option is not part of the lawsuit, even though it most likely was what spurred the rash of robo signings by Chase Bank.

Alessandro Machi   Page 3 of 4   

Americans have been without affordably priced credit card debt suspension insurance for the past 15 years. Credit Card Customers have not been properly advised at the time they sign their agreements that no change in terms will occur without a default first being declared. Customers accused of a Default are routinely falsely served and subserved, and the court judges look the other way, damping the defendants negotiating position with their debt collectors. Unsecured credit card debts are routinely converted to secured debts by the courts even when the defendant has already agreed the debt is owed and agrees to pay a portion of their income to pay down the debt. Debt collectors and judges view defaulters as irresponsible deadbeats when they show up in court without an attorney to represent them, when the opposite is true. The defendants have arrived in court without an attorney because they chose to keep making credit card payments until all of their money was gone, including the money that would have gone to an attorney.

The credit card default system is not just broken, it's been fixed against americans for the past 15 years and reparations are in order. Perhaps as many as 90% of all credit card defaulters since the year 2000 should have their default verdicts overturned. Lump sum payment  restitution is in order for all the penalties, fines and fees that were assessed against alleged credit card defaulters, along with the loss of credit standing and having to pay higher interest rates on any new debt.

When totaled up, there could be 10's of millions of credit card default victims, and the total owed to them could be a trillion dollars. In lieu of a trillion dollar payout, all present credit card customers should summarily have their total credit card debt reduced by 65%, and upon this across the board reduction, the monthly minimum payment going forward should be increased from 2% to  5%, as the Comptroller requested back in 2005.

Much good would come from Consumer Credit Card Default Reparations  as described above, but it would take more time to explain them all.
Alessandro Machi   Page 4 of 4   

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