Faux Indian, Faux Lawyer....Is there a pattern here?
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Credit counseling cuts criticized
Boston Herald - Monday, August 9, 1999
Author: JOE BARTOLOTTA
(EXCERPT)
Three years ago, Rosemary DePont was newly divorced and flirting with bankruptcy.
The Taunton mother of three used credit cards for food and clothing, and her debt soon hit $20,000. Today, DePont, 36, is paying her bills, thanks to a credit counseling agency that helped her climb back from the brink of bankruptcy.
And now, consumer advocates say, credit card issuers have caught agencies like the one that helped DuPont in a financial vise.
Fleet Financial Group Inc. and other major credit card issuers are cutting funds to those agencies, saying the organizations could stand a little belt tightening and save money by becoming more automated.
Consumer advocates complain banks are extending credit to more people than ever before, while shortchanging counseling agencies that can educate card users and set up payment plans that prevent bankruptcies.
Critics say the cuts mean people will be turned away and driven into bankruptcy - at a time when banks are pushing Congress to make it harder for people to shed credit card debt.
Some bankers say the agencies have brought the cuts on themselves, by stepping up advertising that’s attracting record numbers to interest-free repayment plans.
Elizabeth Warren , a Harvard University Law School professor who specializes in bankruptcy and consumer law, doesn’t buy that explanation. She says banks are just being greedy.
“The message is, take our cards and spend, spend, spend, and when you get into trouble, we will squeeze, squeeze, squeeze,” Warren says.
“The growth imperative in the credit card industry means that banks have pushed more and more credit into the hands of less and less credit-worthy people,” Warren says.
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Edition: ALL
Section: Business
Record Number: BNH08090044
Bankruptcy Bill Tightens Rules For Businesses
By RIVA D. ATLAS
Published: March 16, 2001
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