[ Pobierz całość w formacie PDF ]
.the Department of Trade and Industry is looking at the ruling fromthe OFT court case as part of its review into the Consumer Credit Act.38Cases such as this in the United Kingdom have led to advocacy and tolegislative and regulatory proposals.In early 2003, the U.K.Office of FairTrading (OFT) proposed revisions to the Consumer Credit Act 1974; OFT sMelanie Johnson, minster for competition, consumers, and markets, said, This is the biggest shake-up of credit companies for almost 30 years.Thereis no place for rogue traders, preying on vulnerable consumers, in today scredit market.The current system of credit licensing was designed to dealwith a credit sector that was much smaller and less sophisticated than theone we have today.I want to make the licensing rules appropriate fortoday s competitive marketplace. 39The reference to increased entry into, and competition in, the UnitedKingdom by subprime lenders was timely.As described above, in early 2003the United Kingdom s largest bank, HSBC, was in the process of acquiringthe much-sued U.S.-based subprime lender Household International, whichalready owned HFC Bank in the United Kingdom.By mid-2003, it was re-ported that HSBC plans to move into the U.K.sub-prime lending marketby referring poorer customers to HFC Bank, acquired as part of thetakeover of Household International of the US.HFC s branch network of-fers loans with interest rates as high as 35 percent, using Household s ad-vanced credit-scoring and risk management systems.Barclays is alreadyoperating a pilot scheme in the sub-prime market. 40Another U.K.-based lender which is exporting subprime lending is Prov-ident Financial, commonly known as the Provy. In announcing its earn-ings in mid-2003, Provident described the British subprime market as mature, but reported growth in Eastern Europe ( customer numbers inPoland, the Czech Republic, Hungary and Slovakia grew 34 percent to 1.1million pounds); it said it will launch a home credit service in Mexicolater this year. 41 Other U.K.subprime lenders include Shopacheck, Cat-tles, and Caversham Finance s BrightHouse, which is partially owned bythe Japanese investment bank Nomura.42 BrightHouse, whose annual in-terest rate is nearly 30 per cent compared with the bank base rate of 4 percent.nine out of 10 customers also take out insurance which allowsthem to return the goods if they cannot maintain payments, boosting in-terest rates to 80 per cent, has given rise in the British press to the fol- 196 Why the Poor Pay Morelowing questions: Why not insist on an interest cap? Why not also enlistthe banks cash and expertise and seconded staff to ensure that a networkof viable credit unions exists across Britain? 43 As surveyed below, thesesame questions are beginning to be asked not only in North America butalso in Southeast Asia and elsewhere, in response to the expansion of high-rate subprime lending.In Malaysia, outcry about the debt collection practices of loan sharks ledto governmental inquiries which revealed that many of the companiesmost insistent on repayment are, in fact, licensed lenders.For example, justbefore Christmas 2002, the New Straits Times reported on the case of LimSeng Choy, who was assaulted by loan sharks who also carted away hishome appliances.the loan sharks took his identity card, passport, driv-ing license and his hand phone. 44 By February 2003, stories such as theseled to legislative initiatives: Proposals include banning newspapers fromcarrying advertisements of money lenders; empowering the police to searchpremises from which loan sharks operate and seize documents; [and] pro-tecting informers involved in civil or criminal proceedings against loansharks. 45Of the three above-quoted proposals, the first would raise issues underthe First Amendment to the U.S.Constitution (although a form of adver-tising ban has effectively been in place with regard to hard liquor and to-bacco products for some years); the last of the three proposals is sorelyneeded in the United States.In 2002, ICP Fair Finance Watch asked a se-nior lawyer at the Federal Reserve Board if the Board would take action ifCitiFinancial retaliated against a whistle-blowing source; the answer, hardlyheartening, was no. In Thailand, [l]oans offered by loan sharks are costing many factoryworkers.a monthly interest rate of 5 20%.[W]orkers who turnedto such creditors would be asked for their ATM cards and contact ad-dresses.Creditors would call them at work if they failed to pay the debts.Some sent their men or influential figures to intimidate or attack thedebtors.Many workers quit work and moved elsewhere.The governmentshould promote cooperative funds to help workers get access to low-interest loans. 46 The methodology for servicing subprime loans, includingrepeated phone calls to the borrower s work and home, is similar in theUnited States, Thailand, and elsewhere.If civil society organizations coor-dinate their efforts, perhaps the loopholes in the U.S.Fair Debt CollectionPractices Act can be avoided as subprime consumer finance becomes moreprevalent, and more regulated, in Thailand and elsewhere.In Korea, the legislative initiatives have been directed against domesticand foreign lenders: As a revision bill on consumer financing passedthrough the National Assembly on July 31, the Financial Supervisory Ser-vice [FSS] has stepped up.its efforts to stop usurious practices by localand overseas moneylenders.The FSS has found that most Japanese loan Consumer Protection in a Deregulation Network Economy 197sharks borrowed funds from domestic lenders at an annual interest rate of14 19 percent and offered the money to South Korean clients in the low-income bracket at an interest rate of 120 150 percent. 47The last frontier for the global subprime lenders, however, is clearlymainland China.Citigroup and HSBC are making inroads; AIG has, as itlikes to brag, been there since the early 1900s.There are proliferating newsreports of consumers and small entrepreneurs in China who havefallen victim to loan-sharking practices whereby interest payments compounded outof control, loan agreements were exacted by force and threats, and assets ultimatelyforeclosed.[T]heir plight was taken up in March 2000 by the popular news-paper Southern Weekend, published in the relatively liberal southern city ofGuangzhou.But Mr.Jin took exception to the term usury and sued for defama-tion.In a ruling sent to the parties last week, the Xiaoshin Intermediate People sCourt upheld the newspaper s case that usury was a reasonable term to describeMr.Jin s operations, although it said elements of its article were exaggerated.Southern Weekend s economics editor, Feng Qiruo, said the win for the newspaperexposed a failing in China. Why are the underground banks so rampant? he said. Because the state s commercial banks can hardly be relied upon to meet the de-mand for grassroots finance. 48Despite this increasing global proliferation of predatory subprime lend-ing, there is not yet any global bank or lending regulator [ Pobierz całość w formacie PDF ]
zanotowane.pl doc.pisz.pl pdf.pisz.pl milosnikstop.keep.pl
.the Department of Trade and Industry is looking at the ruling fromthe OFT court case as part of its review into the Consumer Credit Act.38Cases such as this in the United Kingdom have led to advocacy and tolegislative and regulatory proposals.In early 2003, the U.K.Office of FairTrading (OFT) proposed revisions to the Consumer Credit Act 1974; OFT sMelanie Johnson, minster for competition, consumers, and markets, said, This is the biggest shake-up of credit companies for almost 30 years.Thereis no place for rogue traders, preying on vulnerable consumers, in today scredit market.The current system of credit licensing was designed to dealwith a credit sector that was much smaller and less sophisticated than theone we have today.I want to make the licensing rules appropriate fortoday s competitive marketplace. 39The reference to increased entry into, and competition in, the UnitedKingdom by subprime lenders was timely.As described above, in early 2003the United Kingdom s largest bank, HSBC, was in the process of acquiringthe much-sued U.S.-based subprime lender Household International, whichalready owned HFC Bank in the United Kingdom.By mid-2003, it was re-ported that HSBC plans to move into the U.K.sub-prime lending marketby referring poorer customers to HFC Bank, acquired as part of thetakeover of Household International of the US.HFC s branch network of-fers loans with interest rates as high as 35 percent, using Household s ad-vanced credit-scoring and risk management systems.Barclays is alreadyoperating a pilot scheme in the sub-prime market. 40Another U.K.-based lender which is exporting subprime lending is Prov-ident Financial, commonly known as the Provy. In announcing its earn-ings in mid-2003, Provident described the British subprime market as mature, but reported growth in Eastern Europe ( customer numbers inPoland, the Czech Republic, Hungary and Slovakia grew 34 percent to 1.1million pounds); it said it will launch a home credit service in Mexicolater this year. 41 Other U.K.subprime lenders include Shopacheck, Cat-tles, and Caversham Finance s BrightHouse, which is partially owned bythe Japanese investment bank Nomura.42 BrightHouse, whose annual in-terest rate is nearly 30 per cent compared with the bank base rate of 4 percent.nine out of 10 customers also take out insurance which allowsthem to return the goods if they cannot maintain payments, boosting in-terest rates to 80 per cent, has given rise in the British press to the fol- 196 Why the Poor Pay Morelowing questions: Why not insist on an interest cap? Why not also enlistthe banks cash and expertise and seconded staff to ensure that a networkof viable credit unions exists across Britain? 43 As surveyed below, thesesame questions are beginning to be asked not only in North America butalso in Southeast Asia and elsewhere, in response to the expansion of high-rate subprime lending.In Malaysia, outcry about the debt collection practices of loan sharks ledto governmental inquiries which revealed that many of the companiesmost insistent on repayment are, in fact, licensed lenders.For example, justbefore Christmas 2002, the New Straits Times reported on the case of LimSeng Choy, who was assaulted by loan sharks who also carted away hishome appliances.the loan sharks took his identity card, passport, driv-ing license and his hand phone. 44 By February 2003, stories such as theseled to legislative initiatives: Proposals include banning newspapers fromcarrying advertisements of money lenders; empowering the police to searchpremises from which loan sharks operate and seize documents; [and] pro-tecting informers involved in civil or criminal proceedings against loansharks. 45Of the three above-quoted proposals, the first would raise issues underthe First Amendment to the U.S.Constitution (although a form of adver-tising ban has effectively been in place with regard to hard liquor and to-bacco products for some years); the last of the three proposals is sorelyneeded in the United States.In 2002, ICP Fair Finance Watch asked a se-nior lawyer at the Federal Reserve Board if the Board would take action ifCitiFinancial retaliated against a whistle-blowing source; the answer, hardlyheartening, was no. In Thailand, [l]oans offered by loan sharks are costing many factoryworkers.a monthly interest rate of 5 20%.[W]orkers who turnedto such creditors would be asked for their ATM cards and contact ad-dresses.Creditors would call them at work if they failed to pay the debts.Some sent their men or influential figures to intimidate or attack thedebtors.Many workers quit work and moved elsewhere.The governmentshould promote cooperative funds to help workers get access to low-interest loans. 46 The methodology for servicing subprime loans, includingrepeated phone calls to the borrower s work and home, is similar in theUnited States, Thailand, and elsewhere.If civil society organizations coor-dinate their efforts, perhaps the loopholes in the U.S.Fair Debt CollectionPractices Act can be avoided as subprime consumer finance becomes moreprevalent, and more regulated, in Thailand and elsewhere.In Korea, the legislative initiatives have been directed against domesticand foreign lenders: As a revision bill on consumer financing passedthrough the National Assembly on July 31, the Financial Supervisory Ser-vice [FSS] has stepped up.its efforts to stop usurious practices by localand overseas moneylenders.The FSS has found that most Japanese loan Consumer Protection in a Deregulation Network Economy 197sharks borrowed funds from domestic lenders at an annual interest rate of14 19 percent and offered the money to South Korean clients in the low-income bracket at an interest rate of 120 150 percent. 47The last frontier for the global subprime lenders, however, is clearlymainland China.Citigroup and HSBC are making inroads; AIG has, as itlikes to brag, been there since the early 1900s.There are proliferating newsreports of consumers and small entrepreneurs in China who havefallen victim to loan-sharking practices whereby interest payments compounded outof control, loan agreements were exacted by force and threats, and assets ultimatelyforeclosed.[T]heir plight was taken up in March 2000 by the popular news-paper Southern Weekend, published in the relatively liberal southern city ofGuangzhou.But Mr.Jin took exception to the term usury and sued for defama-tion.In a ruling sent to the parties last week, the Xiaoshin Intermediate People sCourt upheld the newspaper s case that usury was a reasonable term to describeMr.Jin s operations, although it said elements of its article were exaggerated.Southern Weekend s economics editor, Feng Qiruo, said the win for the newspaperexposed a failing in China. Why are the underground banks so rampant? he said. Because the state s commercial banks can hardly be relied upon to meet the de-mand for grassroots finance. 48Despite this increasing global proliferation of predatory subprime lend-ing, there is not yet any global bank or lending regulator [ Pobierz całość w formacie PDF ]