Citizens Reform Center

Many may remember the terms of office held by James Traficante in the House of Representatives. His was an unusual story of a sheriff in Ohio who ran for Congress, won, and served from 1985 - 2002. His controversial approach, his independence, and outspoken ways certainly brought on conflicts with colleagues who had fallen into preserving the status quo and protecting powerful interests. Traficante found it too difficult to ignore the interests of his constituents and the general public. He was one of the few voices in Congress that actually openly exposed the machinations of the Federal Reserve. He had the courage to criticize the undue power and influence of AIPAC. Finally, he was the source of one too many controversies and enemies from within conspired to create use the legal system against him. He knew that it would lead to prison, where he spent 7 years and was released on Sept. 2, 2009. Now, he’s back in action with a talk-radio show on WTAM.

CRC founder, Mickey Paoletta met up with Traficante a few months back and they’ve been recognizing a lot of common ground. For one, they are both committed to educating the public about the crimes of the financial system. On March 10, Traficante gave a passionate and rousing presentation for a packed room of people in Mechanicsburg, PA. He shared his views on the current issues facing the country. He presented his views on what’s needed for job creation, and much more. He explained in great detail what happened to him in Congress that brought on the prosecution and prison sentence. The overall impression everyone was left with is - James Traficante has plenty of energy and drive for which he wants to dedicate to improving the conditions of the country.

James Traficante presents Mickey Paoletta with an original painting.

The long-awaited protections for credit card holders took effect last week, 9 long months after reform legislation passed which gave banks more than enough to time to enact higher rates and collect millions in fees on unsuspecting consumers. The negative effect this had on their public image didn’t bother them at all. If that’s reform, who can afford it?

So now that we’re here, it’s not a bad idea to learn about some of the changes. There seem to be some good restraints and attempts to standardize various processes in billing. Anyone can Google “credit card reform legislation” and see the details. However, let’s spend time imagining what real far-reaching credit card reform would like.

A few major changes come to mind that one would think would have been tops on the list but was never discussed - limiting how high credit card companies can charge in interest! As we all know, they’ve been free to charge usurious rates as high as 34%. Some have jumped from 12% to 24% for no reason. Even if states have a limit of 16%, for example, if the company is headquartered in South Dakota, they can legally charge 30% or whatever higher rate they want. How could a serious reform bill miss this?

How about requiring the credit card companies to explain what value they provide for the privilege of charging us from our actual labor, plus interest and fees. Why are they allowed to turn around and charge fees to merchants for an additional round of gouging? Why wasn’t this addressed? Do they provide any actual service we should be paying for? Can anyone think of other useful ways that the public could be spending billions of dollars that have been going to enrich the banks through their very elaborate, lobbyist-powered corporate welfare program?

This is the reform we get until enough Americans learn the true nature of debt and banking. Knowledge is power, and as this knowledge spreads through the masses, good things can happen. This legislation is a meager beginning. With the rising tide of anger towards the banking system and FED, the next logical step is to create awareness throughout the masses as well as elected officials that there’s much further to go before true financial reform becomes reality.

On Thursday, Jan. 14 debt collection law firm Mann Bracken, which had been one of the biggest debt-collection firms in the country, closed its 24 offices with little public warning, according to the Baltimore Sun. State financial regulators had revoked their license. And last week, a Maryland judge ordered that tens of thousands of debt-collection lawsuits involving the firm be dismissed.

Mann Bracken principals issued a statement to the Sun that the firm had “no alternative but to wind down” in light of the November bankruptcy filing of Axiant, a company that worked with Mann Bracken to collect debt. “Axiant’s pending liquidation has left Mann Bracken without funds to pay creditors and insolvent,” the statement said.

Axiant had provided Mann Bracken with various logistics such as phone, computer, staffing and support services before filing for bankruptcy in November. The weight of Axiant’s downfall as well as opposition from those targeted by debt collection litigation was too high a cost for the law firm to survive. It got so bad that at one point there was a complete breakdown at Mann Bracken’s Atlanta office with no one to even answer the phone. From all appearances, the falling of this large collection firm is a sign that Goliaths of the debt collection industry can be brought down.

There had been close relationship between Mann Bracken, Axiant, and the National Arbitration Forum, an arbitration firm that has been criticized for favoring credit card companies in debt-collection arbitrations filed against consumers. In 2006, the article noted, Mann Bracken and another law firm it acquired filed almost 60% of the 214,000 consumer-debt arbitrations before the NAF.

The Minnesota attorney general’s office, meanwhile, filed suit last year against NAF claiming it failed to disclose its conflicting financial affiliation with Axiant and Mann Bracken.

Here’s a blog post giving a typical scenario:

October 2008: “Mann Bracken placed a restraint on my checking account, causing checks to bounce and legal fee’s to grow each month. They got a bogus judgment stating that I was served to appear in court. They claimed to have left the summons with a relative of mine, however that relative doesn’t even exist, and the house they supposedly served was boarded up and abandoned. Also, the money they were trying to collect was from a default credit card, which was proven to be fraudulent and so I am not responsible for that debt. I have paper proof from all three credit agencies to back that up also.

It gets better! On December 29, 2009, FIA Card Services (formerly MBNA) filed a cross-complaint against Mann Bracken, in a case brought against FIA, Mann Bracken and others by the San Francisco city attorney alleging professional negligence and breach of fiduciary duty against the law firm. The cross-complaint unambiguously states:

Another factor contributing to the demise of Axiant/Mann Bracken is the high level of abuse resulting in a public outbreak of protest through calls and letters to the Better Business Bureau as well as state regulators which has finally led to sanctions at the state level. Furthermore, there are growing numbers people who are figuring out the fraud, challenging debt collection lawsuits, and beating them. The cumulative result in this scenario was financial failure. However, there is still a long way to go because most Americans have not yet learned their rights or the real nature of bank-created debt. However, this too can change.

Interested in learning how to defend yourself? See the resources on this site and consider joining CRC today.

It should be no surprise. With a severe recession coming on the heels of years of outsourcing followed by predatory lending of sub-prime mortgages, millions of people are unable to keep up with monthly expenses. The biggest expense is housing. Marketwatch.com has reported that James Saccacio, CEO of RealtyTrac, states that “in the long term, a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond, as lenders gradually work their way through the backlog”.

Foreclosures in California, Florida, Arizona and Illinois account for more than half the national total. According to new data released by Lender Processing Services (LPS), one in every 7.5 homeowners with a mortgage in the United States is either behind on their payments or in foreclosure. This equates to a record high 13.2 percent of the nation’s home loans.

Along the same lines, bankruptcies are also at record levels. One of America’s favorite vacation places is experiencing serious hardship, which can be viewed as an economic indicator. The Las Vegas Review-Journal is reporting that bankruptcy filings in Nevada were up 58.6 percent in 2009. Bankruptcies in the state rose to 29,170 filings from 18,389 in 2008.

It’s hard to know what’s worse, the current rate of foreclosures or the impossible prospects for job creation that would generate the necessary level of employment and decent income to enable people to end this downward spiral. The redirecting of Wall St. bonuses to a serious job stimulus would likely find mass appeal at this point.

Read more here.

We all know that joblessness has hit double digits. We know the official rate is far below the actual jobless rate when you take into account people who have stopped filing for unemployment benefits. Just as significant, if people are able to find work, the jobs will almost definitely pay less than what was available in the past. However, the cost of living continues to go in the opposite direction — higher. No wonder people with jobs are working more hours than ever and barely staying afloat. A high percentage of college students were enticed by credit card’s lure of easy money can’t find work and are unable to keep up with payments. This all translates into record levels in credit card and mortgage defaults.

Just do a Google search on “credit card default rate 2009″ and 4,710,000 pages turn up. You’ll learn points like the following:

• Advanta’s default rate more than doubled in June from May to 56.95 percent, and they’ve shut down lamost 1 million accounts after posting three quarterly losses. In Nov. Advanta filed for bankruptcy. This came just after another lender to small business, CIT, filed for bankruptcy.
• We know credit card companies have jacked up their interest rates sky-high to 32% and more. Since the new Credit Cardholders Bill of Rights Act takes effect in Feb. 2010, banks have done all they can to pre-emptively gouge the consumer.
• In August it was reported that Canadian credit card default rates hit record levels. Obviously, this economic strain has hit almost all “first-world” countries.
• In August it was reported that banks were cutting credit limits for 58 million card holders.
  According to the LA Times, in August mortgage default rates soared to 13%.
• The third-largest issuer of Visa credit cards, Capital One Financial Corp. (COF) stated a rise in its net annual charge-off rate to 9.60% in Nov 2009 from 9.04% in Oct 2009. See more figures in this Reuters article.

Throughout the spring and summer articles report that default rates by major lenders increased. This is all the more reason to learn what CRC has to teach about the true nature of banking and debt, as well as what you can do if faced with debt collection actions or foreclosure. Learn how members are being successful in stopping these collections and foreclosures. Also, being part of an excellent support network is key. Having the right knowledge and connecting with the right people will make all the difference.

If you’re in search of knowledge and support, find out how you can become part of CRC’s Legal Club.

Citizens Reform Center held events in Manhattan and Long Island on Dec. 12th & 13th titled “The Truth & Consequences of Banking Credit Fraud”.

People challenged with credit card lawsuits and home foreclosure as well as people desiring to know the inner workings of the money/credit creation process received an information-packed seminar from nationally known banking expert Mickey Paoletta.

Believe it or not, people came from as far as Boston, Rhode Island, and Pennsylvania. At least 5 people who attended the Saturday event couldn’t get enough and made the 1 1/2 hour trip to the Sunday event in Long Island. Although, there are some excellent resources on the history and functioning of the Federal Reserve, attendees got an education which is not being taught anywhere else — the true nature of credit and debt at the consumer level.

For anyone in the NYC area looking for a support network on these topics, email the NYC Area Coordinator. Please include your contact information. We will be having conference calls and meetings beginning in January.

The Truth & Consequences of Banking Credit Fraud

If you or anyone you know is mired in credit card debt, is facing foreclosure, or supports an end to the Federal Reserve’s political domination of financial policy, come hear banking expert, Mickey Paoletta, reveal what the banks and government do not want us to know. The time has come for the reality of banking practices which effects us all to be revealed — the true nature of bank-created credit.

You will learn the legal steps you can take to eliminate your credit cards and stop the banks from taking your home. You will also learn about the Fair Debt Collection Practices Act which entitles you to take legal action against lenders for abuses against you and actually receive large sums of money from debt collectors. Additionally, we will discuss the criminal use of the courts who act as a front for the credit card companies and mortgage lenders who have been committing highway robbery on the average individual, leaving millions of Americans in a state of peonage.

Read the rest of this entry »

In Michigan, hard hit by long-term economic decline, has one of the highest rates of unemployment and foreclosure in the nation. It’s important to understand the sequence of events and potential remedies to stay in your home. If you have a way of coming up with some of the funds, negotiate with the lender. It’s in their interest to work with you.

CRC has helped many people challenge the system and stay in their homes. We’re currently making progress in non-judicial states.

In any event, there are possibilities that will enable a homeowner to delay the loss of their home, if not stop the foreclosure altogether. For more, see this article about foreclosure in Michigan.

The credit card companies simply have no shame. Regardless of the political pressure and public backlash they’re likely to experience from raising interest rates before the new law takes effect, they’re raising them anyway.

What can you do? Call and complain. Threaten to take your business elsewhere. Get a card through a credit union. According to a news report on Channel 10 in central Ohio…

“Consumer Reports says you can often find better credit cards from professional organizations, such as teachers’ associations, from credit unions, and from community and regional banks.

“There are now often one-time fees on balance transfers, so before you switch to a new card make sure you check that,” Kleman said.

Also check if the new card carries an annual fee. The kind of charge is making an unwelcome comeback. Credit unions can be a good place to get a credit card. These days it’s easier to join a credit union than it used to be.”

Read about the entire report here.

What good are banking regulations designed to stop predatory lending practices if they aren’t used? This is just how the subprime lending catastrophe happened according to a recent Washington Post article detailing how the FED may have been watching banks, but not their subprime affiliates. Furthermore, evidence has surfaced that minority neighborhoods were targeted for these risky mortgages with fine print that often went unnoticed which referred to adjustable interest rates. Community groups requested oversight and action from the FED to no avail. Millions of people have lost their homes due to these deceptive lending practices.

See full article here.