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Gallagher Hosts Public Education Forum on Predatory Lending in Tampa

5/12/2003

CONTACT: Tami Torres
(850) 413-2842
Jane Lyon
(727) 587-7260
Dept. of Financial Services

TALLAHASSEE – At a public forum today in Tampa, Chief Financial Officer Tom Gallagher, consumer groups and the financial services community joined together to discuss strategies for educating the public about the dangers of predatory lending.

Participating with Gallagher as panelists at the forum were Ed Gallagly, President of the Florida Central Credit Union; Bill Clark, AARP; Frank Rodriquez, First National Bank; and Norm Stepno, Florida Association of Mortgage Brokers.

Predatory lending occurs when a borrower is charged excessive fees or obtains a loan that is impossible to repay. Predatory lenders often aggressively market loans to consumers who have limited access to mainstream sources of credit, such as the elderly, military personnel and homeowners in low-income neighborhoods.

"Predatory lenders offer easy access to money but leave consumers vulnerable to inflated interest rates, exorbitant fees and harassing collection tactics," said Gallagher, who heads up the Department of Financial Services. The department has received more than 1,400 complaints about predatory lending practices.

Gallagher's agency, along with the financial services community and AARP, kicked off a public education campaign last month to help educate and warn the public about predatory lending practices. "An informed borrower is less vulnerable to fraud and abuse," Gallagher said.

As part of the public education campaign, public service announcements for both radio and television started airing March 15. In addition to the public forum held in Tampa today, a forum will be held in Ft. Lauderdale later this month. Forums have been previously held in Jacksonville, Pensacola and Ft. Myers. The Florida Bankers Association, the Florida Association of Mortgage Brokers and the Florida Financial Services Association have offered financial support of the public education campaign.

Last year, state lawmakers passed the Florida Fair Lending Act, which aimed at cracking down on predatory lenders. The new law requires lenders to disclose certain facts prior to closing a loan and prohibits deceptive loan tactics, including:

§ extending credit regardless of a borrower's ability to pay,
§ calling a loan due even though the borrower has complied with the terms of the loan,
§ refinancing a loan during the first 18 months unless there is a benefit to the borrower,
§ charging pre-payment penalties for longer than three years,
§ increasing interest on loans going into default, and
§ balloon payments on loans that mature in less than 10 years.

To verify if a company or broker is licensed or to get tips on avoiding predatory lending practices, consumers can contact the Department of Financial Services' toll-free helpline at 1-800-342-2762 or log on to the department's website at www.fldfs.com and click on the link for "Consumer Tips on Predatory Lending."

NOTE TO MEDIA: Those interested in obtaining a BETA copy of the public service announcement can call the department's Press Office at 850-413-2842.