ODECU of Chile

it card scams are the bad penny perfected in the United States that is turning up now elsewhere in the world.   These practices are not the foul play of bad actors as predatory lenders always claim, but intrinsic elements of corrupt, exploitive business models.  The economic success stories in [...]]]> New Orleans Cred

ODECU of Chile

it card scams are the bad penny perfected in the United States that is turning up now elsewhere in the world.   These practices are not the foul play of bad actors as predatory lenders always claim, but intrinsic elements of corrupt, exploitive business models.  The economic success stories in Brazil and Chile now seem threatened by the avarice of casual corporate corruption matched as usual with light to non-existent regulation and consumer protection regimes.

In Brazil the debt to income ratio has risen from 22% to 40% in only five years from 2006 to 2011 according to a study quoted by Alexei Barrionuevo in The New York Times. In Chile in 7 years the ratio has goen to 70% according to the Central Bank.   There’s no question the model is predatory with interest annual interest rates reaching 220% in Brazil and no limits anywhere it seems.   The situation is especially intense at retail chain, freely issuing cards to working and moderate income customers to access basic consumer goods, and then routinely adjusting the terms and levels of the interest rates on the debt without any notice to the customer.

These cards were supported by transnational banking big boys like UK’s HSBC and Spain’s Santander and Itau-Unibanco, all of which, especially HSBC, absolutely knew better, but couldn’t resist the rip-off, knowing that they could get away with it.  When confronted by the prosecutor’s office in Brazil, the banks ignored appeals to fully compensate customers.

It was shocking to read that there are no only no limits to the level of interest rates in Chile, but also no way for an individual to be able to file for personal bankruptcy and get their act together.  Unfortunately, when ripped, there’s no way for them to run – or reorganize.  Stefan Larenas of the Organization of Consumers and Users of Chile, speaking about the Equifax-owned, unregulated Dicom credit score outfit in that country, was quoted ominously that, “If you are in Dicom, if you are not in hell, you are on the way there.  It is a true social stigma here.”  Seems a bad score not only bars you from any future loans, but is also seen as a legitimate reason to block you from future employment, creating a debtor’s prison without walls.

Predatory financial injustice is a global issue with most central banks simply burying their heads in the sand, just as our Remittance Justice Campaign has uncovered everywhere, and leaving workers and families nothing but fresh meet for corporate crime.

Today in Toronto Kay Bisnah, President of ACORN International, also unveiled an extensive report underpinning [...]]]> Phoenix In Vancouver, Toronto, Ottawa, and Hamilton ACORN International and ACORN Canada joined today to dramatically step up the international campaign to achieve improved access and fair pricing for remittances from immigrant families and their relatives in their home countries.

Today in Toronto Kay Bisnah, President of ACORN International, also unveiled an extensive report underpinning the campaign called Past Time for Remittance Justice (a copy is available at www.remittancejustice.org or www.acorninternational.org). The report is the result of  months of work and research by a multi-national research team including a battery of student interns with ACORN International at George Brown College in Toronto as well other researchers in Baltimore, Little Rock, and New Orleans joined with ACORN International and its federated organizations and staff in Latin America, Africa, and Asia.  In a survey of costs focusing on major global banking institutions as well as Western Union and MoneyGram, ACORN International found that the costs are exorbitant and predatory and averaged more than double what the World Bank estimates current pricing.

President Bisnah is expected to ask Toronto Dominion at the release today in Toronto to set an early meeting with representatives of the organization in order to begin discussions on how remittance justice can be achieved as quickly as possible.  Members of ACORN Canada will be demanding similar meetings with HSBC at the Canadian headquarters of the bank in Vancouver, while members in Ottawa will be pressing the Bank of Montreal for a meeting as soon as one can be scheduled.   In Ottawa demands are also going to be made for Canadian regulators to take up the issue of remittances and begin creating a mandatory and effective system.

The grid in the report shows costs can in some cases suck out almost half of the money being sent to families in home countries by as much as one dollar for every dollar being transmitted.  In few cases were charges, commissions, and exchange rates taking less than twenty-five cents on the dollar.  The report calls into question World Bank estimates of an average 10% cost factor and while adopting the World Bank goal of no more than 5% costs, ACORN International calls for the changes to be immediate and comprehensive, including both sending and receiving fees.

Remittances are huge and involve an estimate of over $430 billion with 75% going from developed countries like Canada and the United States to developing countries.  Remittances are a substantial part of the gross national product (GNP) for many of the poorer countries and populations in the world.

ACORN International indicated that in coming weeks more banks will be targeted.  Beginning next week the demands will spread first to Lima, Mexico City, Buenos Aires, San Pedro Sula, Tegucigalpa, and Santiago (Dominican Republic) as well as Nairboi, Kenya and Mumbai, Delhi, and Bangalore in India.  ACORN International also intends to release the report and press demands with major banks headquartered in the United States, United Kingdom and elsewhere, as well as demand government accountability in the same locations.

The sum of remittances dwarfs all other forms of foreign aid and foreign direct investment in developing countries.  A reduction from a 10% average transaction cost to a 5% average would move more than $20 billion in remittances to aid families.  ACORN International believes there is nothing to justify existing charges, and seeks in the Remittance Justice Campaign to push charges to real and reasonable costs rather than the current global “highway” robbery of banks and transfer companies.

No doubt there will be a lot more to come, since these are big targets and this is a lot of money, but there is no question that justice must be come.

◦     Remember Tim DeChristopher [...]]]> New Orleans Sometimes it’s worth returning to our old themes and seeing what has happened to issues we have raised consistently in the past.  We did so yesterday with Sheriff Arpaio who should serve as a rally cry for all who seek justice.  There are some other issues worth remembering briefly:

◦     Remember Tim DeChristopher who saved thousands of acres of BLM land on the auction block in Utah by stepping up and putting in bids himself.  This had been a sneak attack auction for oil and gas allocations before the end of the Bush Administration.  Most of the properties DeChristopher challenged have now been pulled by the Obama folks some with scorn.  But, what happened to Tim?  He’s about to go to trial on on two felon criminal charges of interfering with a federal auction and making false statements on bidding forms. Let no good deed go unpunished, eh?  He’s hoping to use his day in court to challenge the environmental land policies of the BLM.  Free Tim!

◦     We’ve talked about the charter school hijacking in New Orleans after Katrina.  One of the poster children I brought up was the expropriation of Benjamin Franklin High School (which I attended, as did my daughter), inarguably one of the finest public high schools in the country.  The one school that represented the best work in many ways of the public system in New Orleans and would have been a beacon for rebuilding was seized by a collection of self-interested teachers, administrators, and parents whose primary interest was their own and not the publics.  The issue of racial balance in the school with the rest of the district and elitist concerns about “watering” down the standards were ever present in the background.  Interestingly, Franklin is one of the four schools reported on a list for potential revocation of the charter, because of what seems financial mismanagement issues:  $1M+ in the hole for 2008 and overruns of $500,000 for 2009.  Franklin seems now a case study for why one needs central management and public accountability through elected school board members.

◦     HSBC, the owner of Household International which was one of the big sub-prime operators, used to defend the purchase and management of Household at every turn, but has now admitted that the purchase was a mistake.  Where once Household seemed a foothold for HSBC broadening its reach in the United States, the continuing problems are leading it to refocus on growing markets in Asia and its long presence there as the Hong Kong Shanghai Banking Corporation.  Past CEOs who wouldn’t listen to the warnings are watching as the current CEO relocates the headquarters and his office from London to China.

◦     Erik Eckholm with the Times notes that infant mortality for African-Americans was finally equalized in Madison, Wisconsin.  Outreach – good old fashion home visits – seem to have made the difference.  When will we learn that we can really fix deep issues by hitting the doors?