Consumer News Release
For immediate release - Friday, October 11, 2002.
Contact Tam Ormiston or Bill Brauch - 515-281-6364, or 281-8772.
Miller: Iowa's Share of Household Settlement Could Reach about $1.3 Million
States Settle With Household Finance: Up to $484 Million for Consumers
Remarks of Iowa Attorney General Tom Miller:*
I am extremely hopeful that this settlement will signal a new day for protecting lower-income borrowers and every consumer involved in the All-American dream of home-ownership.
Household Finance is changing its ways - and paying an enormous sum in restitution to consumers. This is the largest direct restitution amount ever in a state or federal consumer case, totaling up to $484 million nationwide, depending on how many states participate - and it looks like almost all states will participate.
Iowa's share - based on Iowa Household customers' share of Household's overall loan volume nationwide - is expected to be about $1.3 million. Household has roughly a thousand customers in Iowa. Restitution terms and arrangements remain to be determined over the next few months, depending on what practices by Household harmed which consumers in Iowa. (Consumers do not need to call Household or the Attorney General's Office at this time. There will be notification and public information after determinations are made on how to allocate restitution.)
This is a landmark decision for Iowa and the nation. We alleged that Household violated state laws by misrepresenting loan terms and failing to disclose material information to borrowers. We believe that some consumers were virtually trapped in expensive loans by some of these practices, and were unable to refinance elsewhere at reasonable rates.
The cooperative work by state attorneys general and state financial regulators in this case has been extraordinary and unprecedented - and it has yielded extraordinary results.
This is a major blow for fairness in the marketplace, especially for lower-income Iowans involved in the paramount goal of home ownership. We were very pleased with Household's cooperation, we are gratified by what this means for consumers, and we are very optimistic that this will be viewed as a landmark in improving consumers' treatment by the subprime lending industry.
[End of Tom Miller statement.]
* Iowa Attorney General Tom Miller is the lead attorney general in the nationwide Household working group. He led the announcement of the settlement Friday morning in Chicago, Household's home area. Miller is the Chair of the Subprime Lending Committee of the National Association of Attorneys General (NAAG.)
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National Release issued in Chicago by Attorney General Miller and others.