Hopeful Innovation Solutions

Press Release

Hopeful Innovation Solutions

Bold Plan to Relieve America's Credit Crunch, Address Foreclosure Crisis, and Stop Abusive Credit Practices

"As I listen to voters across the district, many families have shared their personal stories of suffering and loss from the vicious cycle of debt. It is time that the federal government take strong action to help countless families who have lost their homes to foreclosure here in Colorado, and millions more across our country who are looking at that prospect in the near future.

"We need people in Congress who will be on the side of ordinary families feeling the credit crunch intensely today, who will lead on ending abusive lending practices by credit card companies and payday lenders, exploding mortgage rates, and bankruptcy laws that deny families a second chance.

I will bring my business experience and vision to Congress to help families get a fair shake from lenders." - Jared Polis, June 24, 2008

Jared Polis has the experience to protect Americans from abusive lenders. He helped create the progressive infrastructure that has pushed for needed change in Colorado since 2004, chaired a National Commission on Financial Literacy, and helped continue the fight in 2008 with his strong support for organizations fighting the payday lending industry.

The Polis Plan for America's Credit Crunch

Relief for Families Caught in Foreclosure Crisis:

Colorado families have been hard hit in the current wave of foreclosures that is sweeping America and threatening our economy. The current rules surrounding mortgage borrowing were written to punish those who played by them, and reward irresponsible, predatory lenders. Exploding adjustable-rate mortgages are merely symptomatic. We need new, sweeping rules to protect borrowers and put the brakes on reckless lending:

• Establish a Financial Product Safety Commission. This Commission will act in the same manner as other consumer safety commissions. It will establish guidelines for consumer disclosure; review new financial products for consumer safety; and modify dangerous financial products before they can be marketed.

• Prevent nearly 2 million Americans from defaulting on their mortgages by enacting the FDIC's proposal for a temporary freeze on introductory rates for the most default-prone adjustable rate loans. This will apply to borrowers who live in their homes, are current in their monthly payments, and have not yet faced an increase in their loan rate.

• Preserve communities adversely affected by foreclosures. While taking action to prevent foreclosures, the federal government must also work with lenders who do foreclose on properties to ensure these properties are responsibly maintained and that neighborhoods are protected from blight and decay.

• Extend the time period that debtors are allowed for repayment in order to support long- term mortgage restructuring.

• Regulate reverse mortgages so that they do not take advantage of the elderly, and require lenders to finance independent financial counseling and education for those taking out these mortgages.

• Establish a 90-day notice for renters before they can be evicted from their homes.
• Strengthen the Federal Housing Administration by lifting its loan limits and reducing FHA required down-payments to 1.5 percent from 3 percent.

Bankruptcy Should Mean a Fresh Start:

In 2005, Congress passed harsh bankruptcy ‘reform' laws that punish Americans hard hit with catastrophic medical bills and divorce, deny them a fresh start, and reward the worst predatory lending by credit card companies, payday lenders and subprime mortgage firms. The same credit card companies that poured political contributions into congressional races wrote the 2005 legislation.

Jared Polis will be independent of these special interests, and will fight to restore this important social safety net for middle class families by fixing the credit card industry-authored bankruptcy laws.

• Give primary housing residences the same status as vacation homes so that mortgages on peoples' actual homes can be restructured during bankruptcy. This alone will prevent some 600,000 hard-working Americans from losing their homes in the coming months and years.

• Change the federal bankruptcy code to allow judges to restructure debtors' mortgage payments in addition to their other debts.

End Abusive Credit Card Practices, Crack Down on Payday Lenders:

American families today are experiencing an increase in household debt that has no historical parallel. Increasingly, much of the debt is owed to credit card companies for items such as medical bills, college education and housing. Large fees, high interest rates, and a myriad of hidden costs are a growing burden on families' budgets. Jared Polis will take on the abuses of largely unregulated credit card companies and payday lenders that are finding new ways to pick the pockets of ordinary Americans every day.

• Guarantee transparency in the credit card industry and all of its activities by insisting on ‘plain English' instructions for all credit card contracts. Users of credit should not need a PhD to understand what they are signing.

• Prohibit retroactive higher interest rates on balances incurred before a rate increase went into effect.

• Place limits on interest rates that can be charged for medical and student debt and prevent credit agencies from downgrading credit scores due to these debts.

• Prohibit repeated over-limit fees. These fees should be charged only one time, unless additional charges increase balances above the account limit.

• Prohibit ‘double-cycle billing,' and other practices that result in interest rate charges on balances that were paid on time.

• Extend to all Americans the tough protection from payday lenders that Congress has already instituted for military families. Limiting effective interest rates to 36% (instead of the more typical 350% that many Colorado borrowers pay) will help families and put more money into the real economy instead of the pockets of this $400 billion industry.

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