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Copyright 1998 by National Clearinghouse for Legal Services. All Rights Reserved.

Less Than Six Degrees of Separation: Consumer Law Connections to Your Practice
(Part I)

By Deanne Loonln and Elizabeth Renuart. Deanne Loonin is a staff attorney at the National
Consumer Law Center (NCLC) Boston office, 18 Tremont St., Suite 400, Boston, MA
02108;617.523.8010. Elizabeth Renuart is a staff attorney at NCLC's Washington. D.C., office. 1629
K St. NW. Washington. DC 20006; 202.986.6060. They thank Margot Saunders, also of NCLC, for
her contribution to the discussion on the electronic transfer of state and federal benefits.

Due to welfare reform and economi" changes, more and more welflUC recipients, new immigrants. and other
low-income individuals are entering the work force and confronting the complex consumer marketplace. often
for the flI'St time. Unfortunately the same forces of competition that effectively fuel the national economy tend
to work loss well for these low-income consumers. This population is also selectively targeted for some of ~e
worst consumer abuses by the exploitative fringe marketplace. More important than ever, legal services
advocates must recognize consumer law issues in their practices and understand basic consumer law remedies.
11:rls flI'St part of a two-part article gives an overview of the connections between 'Consumer law and other

practice areas. It focuses on consumer law for welfare advocates. family and domestic violence advocates, and
advocates with immigrant clients. The second part, to be published here also. will discuss housing. health. and
senior issues.
.
Read together. the two parts are intended to give all practitioners a greater appreciation for how consumer law
can help addreSs a variety of legal problems and an understanding of how developments in the private
marketplace affect the lives of low-income people.

I. Welfare Advocates: Helping Clients Out of Poverty

The ultimate goal of a legal serVi~ practice is to help clients get out of poverty. At the most basic level this
means helping people maximize their incomes and reduce their expenses. The work of both welfare advocates
and consumer advocates is 'Critical in helping clients attain this goal.

A. The Holistic Approach

to

Consumer law problems often sUrface in what at first glance appears be straightforWard public benefit cases.
hi some caSes a client may be ineligible fot education benefits due to preVious student-loan defaults. Problems
with repossessions. prior debts. and negative credit ratings also can arise in public benefit cases.
Consider this example of how an expanded knowledge of consumer law can help a public benefits specialist
solve a problem that is presented as a welfare issue.

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A client calls because she may apply for a welfare avoidance grant under her state's new Temporary Assistance
for Needy Families (fANF) program to eliminate or reduce a debt that may prevent her from gaining and
keeping a job. She is behind in her car payments and faces the prospect of having the car repossessed. The
advocate determines that the grant may be used to pay the arrears because the client needs her car to find work
and get to work. Public transportation in the area is inadequate. The advocate discusses this with the agency,
which is agreeable.
But there is trouble. The agency will take a few days to process the check and send it to the creditor. In the
meantime the advocate consults a consumer attorney. who advises her that if the creditor does not agree to wait
the client legally may keep the car in a locked garage until the check is availableJl/1f the car is repossessed,
however, a repossession fee, storage fee, and other charges that the TANF grant may not cover may be added to
the cost to redeem the vehicle. Further, once the car is repossessed., time limits may apply to 1he consumer's
right to redeem the property. If a snag at the welfare agency delays the issuance of the grant, the car could be
sold.
By knowing the client's options and rights before the rePossession, the public benefits advocate can help the
client better to protect the value of the welfare grant Gaining exposure to consumer law can enhance greatly the

services for the client.

S. Maximizing Income and Reducing Expenses

Consumer law is important because it furthers the basic goal of a welfare law practice to help clients apply for
and receive all the public benefits to which they are entitled. Consumer law practitioners complement their
welfare law counterparts by reducing the family expenses.l2l This increases the value of every dollar of income
..
coming into the household.
Lowering family expenses is accomplished by reducing or eliminating the debts that the family owes. Examples
include defenses against car repossession, mortgage fon:closures,131 unconscionably priced goods and loansJ41
overreaching creditorsfSI and collectors;/6I access to reasonably priced energynl and credit;/81 discharges of
student loans or reduction of the monthly payment;/91 and bankruptcy JI01 More specific tips on how to reduce
expenses are discussed throughout parts one and two of this articleJll1
Another part of the equation includes knowledge about how to protect a family's income and assets from
judgment creditors: Critical is an understanding of the scope of federal and state exemption statutes that protect
against the attachment of wages above a certain amount, federal and state public benefits, and real and personal
property in the hands of the family or held by others ( e.g., bank accounts)JI21
When all of the income and assets of the client are protected by state and federal exemption and garnishment
laws. creditors can dO nothing to collect from the client until and unless the family income or assets
increaseJ131
Helping clients understand these protections can alleviate a great deal of family stress.

C. Not Paying More for Credit

Another important way to help clients minimize their expenses is to educate them about how they pay more for
credit and how this problem can be avoided.

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A common perception is that low-income people do not need credit and that they cannot afford it. The reality is
that the need to establish credit is so pervasive that it affects many aspects of ordinary existence. For example,
the absence of credit or "bad" credit may be why a client is denied admission to rental housing or prevented
from opening a bank account.l141
Despite the best efforts of welfare advocates to maximize income and the efforts of consumer advocates to
reduce expenses, the poor pay a great deal more for the credit extended to them than any other economic
population in this country. To make matters worse, the cost of credit and other financial services is growing.

D. Bank and Usury Cap Deregulation and the Cost of Credit

The poor pay more than those with more money.,..in particular in such service establishments as check cashers
and rent-to-own stores. Advocatesn~ to appreciate the basic problems in order to come up with solutions to
help clients get the most out of their limited incomes.
The deregulation of banking in the 1980s essentially ended the movement to include the poor in the financial
mainstreamJ151 The number of houSeholds without a bank account increased 77 percent between 1977 and
1989 and is now estimated to be ten millionJl6! In parts of the country branch bank closings left some
communities banklessJ171 Thus millions of low-income households no longer have access to free financial
services.
The ability of households to maintain savings accounts and minimum balances or to pay increased fees on
checking accounts was undoubtedly affected by the marked increase in the number of people falling below the
officially defined poverty level between 1977 and late 1991. Shockingly at least ten million more individuals
fell into poverty during that timeJ181
The rush to raise or eliminate caps on usury rates began in 1980. This movement was fostered by Congress
passing several laws preempting state usury caps on first-lien mortgagesJ191
Into this vacuum marched the check cashers, pawnbrokers, rent-to-own companies, high-rate finance
companies, and equity mortgage lenders.1201 From 1985 to 1992 the number of check cashers doubledJ211 The
number of pawnbrokers also skyrocketed in the same period. Since the early 1980s, rent-to-own stores have
grown from 2,()()() to about 7,5OOJ221
Many of these lenders have been "legitimized" because they are public corporations traded on the stock
exchange. Some are bankrolled by the big names on Wall Street. Given an estimated market of $200-$300
billion a year, the profits are mind bogglingJ231 Between 1992 and 1996 the top finance companies increased
their combined net income 82.5 percent nationallyJ241 Eleven fmance and pawn companies paid more than $16
million in salary and bonuses to their chief executive officerS in 1996J25l These are businesses that "bottom
feed" on the fringe economyJ26/
That minority borrowers pay more for credit than their white counterparts is well documented. Race is also a
significant factor in credit denials. Thus discrimination in the delivery of financial services exacerbates the
racial and class divisions that already plague our society.l271
Below is a brief description of how fringe lenders operate and take advantage of the poor's inability to obtain
credit from mainstream lenders, how much individual clients can pay for these services, and to what extent
fringe lenders are regulated.

Check Cashers. Check-cashing fees have mushroomed since 1987.1281 For example, a worker who cashes 50

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$320 payroll checks can pay from. $1~ to $960 (average of $374.S0) to the check casher per year. A public
benefits recipient who cashes 12 govemment checks of $SOO can spend from $48 to $360 (average of $132) per
year. Of course, clients without bank accounts must then pay bills, often with money orders. The purehase of
just 48 money orders a year (4 per month) costs an average of $288.1291
Advocatc$ should check their state statutes for possible challenges to the most egregious practices. Cbeck
cashing companies, however, are "regulated.. only in 13 statesJ30/ Typically statutes cap fees from 1 pe1'CCnt to
10 percent, or a certain amount, whichever is gmater. The tate caps sometimes vary with the type of check to be
cashed (i.e., payroll, govcmment"or personal). Many states n:quire that the check cashers be licensed. Some of
the statutes require the check casher to post its fees in a prominent location in the store and to give a customer a
receipt./3l1
Payday Loans. A large segment of the check-cashing industry also extends ahort-tenn loans (called payday
loans) at tJ:ip1e-digit interest r:ates to consumers'who write postdated checks.l321 Such a loan is an extension of
credit created by the exchanging of ~ for a postdated check, with a service charge ranging from 10 ~t to
2S percent of the check amount withheld from the cash returned. The check is then held for one to fOlD." weeks
(usually until the customer's payday), at the end of which the customer may n'ldccm the check by paying the
face amount. allow the check to be cashed. or write anotbel' postdated check and pay another service charge.
Strong legal theories can be used to challenge these loans.l331 Unfortunately, in the last few years, 12 states
have enacted legislation or regulations to legitimize the charging of such fees and exempt such loans from the
small.,.loan acts.1341 A handful of states expressly prohibit check casbers from accepting postdated checks.l3S1'
Pawnbrokers.M.any pawnbrokem charge up to 200 pCn:ent annually on their loans. Typically pawnbrokers
loan only an amount equal to SO pc:!l'CCnt or less of the value of the goods pawncd..l3l
Here,regulation is somewhat stronger. AJ.most every state has enacted laws that regulate pawnbrokers in some
way.l371 Generally. when someone pawns goods, the temI8 of the agreement must be specified on the pawn
ticket. 'lbe ticketa1so may state the customcl's name and address. a descrlption of the pledged goods, the
amount lent, the maturlty date, and th~ amount that must be paid to n'ldccm them. Most states set ceilings on
interest rates and,other fees that pawnshops may charge.IJ.censing of the pawnbroker is almost universally
requiredJ381
Auto-title pawn tnmsactions are'a new phenomeiloil. 'lbe car owner paWns title to the car in exchange for cash.
Some pawnshops then lease back the use of the car to the owner. Others simply obtain a security interest in the
property, while the owner retains possession. The costs of these transactions can be astronomical, with annual
percentage rates of over 900 percent./391 In the walcc of some adverse judicial rulings, the industry has soughtwith success-the stamp of'legislative approval in several statesJ40I
'

Rent-to-Own. Rent-to-own (RTO) contracts are supposed leases masking installment sa1esJ411 These sales are
made at astronomic and undisclosed effective interest rates. Under many RTO contracts the custoIDer can pay
between $1,000 and $2.400 for a television set, stereo. or other major appliance worth as little as $200, if used,
and at most $600, if new. If a customer leases anew 19-inch color television set (worth $3(0) for $16 per week
for S2 weeks, the annual percentage rate would be about 2S4 percenl 'lbe total of payments is $832. '
.
Reacting to the growth of the RTO businesa, many states have amended their instal1mcnt-sale atarlltes
specifica:lly to cover RTO transactions. Other states have decided to treat RTO contracts as unique transactions
outside normal sales provisionsJ421

Other IDgh-Rate Lenders. Finance cOmpanies make somewhat largerpersona1loans at rates that can reach 30
percent or moreJ431 Some mortgage companies target,homeowners who have credit problems or a large amount
of equity in th~irhomes. These homeowners are convinced to sign on for mortgage loans with high fees and
intomt IlltC6J44I

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E. ImpllcaUons for Public Benefits Advocacy

The inescapable conclusion is that the ability of low-income families to take advantage of the positive aspects
of welfare-to-work and other public-assistance programs is limited by the enormous cash flowing out of low
income communities into the pockets of high-rate lenders.
Advocates who creatively help their clients to maximize income and reduce expenses need to consider the value
of educating clients about the cost of credit and how much it affects their budgets. Only when clients understand
the overall costs of using such lenders can they begin to decide alternatives, if any, that will reduce their
monthly expenses. Using low-cost checking and savings accounts (to the extent they are available ill low
income neighborhoods) to avoid the costs of check casherS is a start. .

But education alone is not enough. Creditalternatiyes must be available to low-income households. Atleast one
state and one California county are attempting to address the "lender" problem as part of their welfare-w-work
initiativesJ4S1 Wisconsin's legislature has set aside approximately $4 million for the next two years to create a
Jobs Access Loan Fund. The purpose of the loan fund is to allow eligible applicants to botrow up to $1,600 at
no in~rest if the loan will help them find or retain employment and if the loan will be used to address an
immediate and discrete financial crisisJ46I
Ventura County, California, is specifically addressing the need for transportation by offering low-interest cat
loans guaranteed by the county. Aging fleet cars will be donated by local businesses and made road ready by
community college automotive students. Dealerships then will donate "repairs" to help keep the cars running
reliablyJ471
Credit unions also make small loans to their members that can be used to purchase household furnishings (and
avoid RTO costs). Credit unions therefore may be a good alternative to finance the purchase of medium-sized
ticket items such as a refrigerator or stove.
AP. advocates monitor the success and failures of their states in implementing welfare changes, creative
approaches to stopping the flow of money from low-income households must be discussed.

F. The Effect of Electronic Banklng

Consui:ner and banking issues will beco~ even more important in the next few years as low-income consumers
are forced into electronic banking. The Personal ReSponsibility and Work Opportunity Reconciliation Act of
1996 mandates that states move all food stamp recipients to an electronic delivery system by 2oo2J481 Many
states also will be establishing electronic benefit transfer (BBT) systems for other state-administered benefits
such as T ANF and possibly even unemployment insurance. At the same time the federal government is setting
up a system to make all federally adniinistered payments electronic by January 1, 1999J491
Both mandates will cause radical changes in the lives of low-income people because they will force a complete
change in the way they receive and spend their incomes.
EBT. UsingEBT. government agencies establish benefit accounts to be accessed by recipients electronically
through automated teller machines (ATMs) or point..af-sale terminals tied to the financiallretail network.
EBT has the potential to eliminate many of the problems benefit recipients have encountered with traditional
checklvoucher benefit delivery systems, including mail theft, late benefits, and lost/stolen vouchers. There are,

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however, down sides. '

For instance, seniors and other clients with mobility limitations are likely to have difficulty accessing ATMs.
Others may have problema purehasing food and other essential items at ~e closest local stores because some
owners cannot affoId to install a point-of-sale systmIi. Unauthorized transfers of benefits and/or theft of ~TM
cards also may occur, and low-income individuals are far less lUrely to have reserves to fall back on pending the
resolution of these problems.
Advocates need to address these potential prOblema during the BBT system dcsignphase and to ensme that
consumer protections are considered in addition to cutting costs and fraud coiltroIJSOI
Electronic Fund Transfers. Congress mandated that as of January I, 1999. all federal payments, except tax
refunds, must be made electronicallyJ511 The most common benefits affected are social security, Supplemental
, Security Income, and veterans' benefits.
..

It is eaSy to' see h~w payments wiD be made eteCtromcally to those who have bank accounts. The difficult .
question is how federal payments will be made electronically to the ten million recipients who do not have bank

accounts.
ProposedT:reasury regulations answering this question raise a number of problema for low-inco~ ~lien~JS2I
A major problem involves the kinds of iDltitutions sending fedetal payments to the unbanked. This ISSUC IS
.
important not only because of the fees that would be chaIp:l by the alternative financial providers but also
because of all the other servic:es that these providers would madcct to the poor. These providers may be ~e
check cashers, payday lendea. and others that often prey on the poor. Allowing these alternative ~C1al
providers to be the cOnduits for federal payments can be both expensive and harmful,to federal IeCip1ents and
their communities.
.
,
Advocates must work with the Department of the Treasury and Congress to figum out how to deliver federal
.
benefits to theunbanked in order to improve the lives of the recipients. not make them,hatderJ531

G. Student"Losns
Borrowing is the only way most low-income individuals can pumue higher education, and education is o~
key to escaping poverty. This is especially true of public-assistance recipients, many of whom are n~w ~
to find jobs. Too often they are prevented from pursuing new educational opportunities bcCaJ,lse theit delinquent
loans make lJlein ineligible for new io&ns. Yet without furthercducation they are often unqualified for any but
the 10weSt-payingjobsJ54I
In some ciroumstances a client's studcDt loan debt may be eompletely Mitten off. This means that ~ client ngh0
longer will owe anything and has a right to reimbursement for any monies paid out of pocket or ~ throU: al
a tax refund intercept or other means. Write-off regulations also require cleaning up a client's ctedit and renew
of eligibility for loans au:;ad grants.
'
Many of these discharge rights apply specifically to clients who attended scam vocational schools and noW owe
thousands of doUars for tleducationaltl programs from which they derived little or no benefit/551
Qosed-School Discharges. Oosed-sehool discharges apply to students who received Federal Family ~
Loans (FFBLs)l561 on or after lanwu:y 1, 1986JS71 To qualify for such a discharge. the student must have
due ~ the school:s ~losureJ58/ The student must have been ~Ued whf ~
unable to complete a
school was closed or must have WIthdrawn WIthin 90 days before the school's closure. Official schOO c .

course

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dates can be found in the Department of Ed.ucation's cumulative list of closed schoolsJ59/
False-Certification Discharges. A student is entitled to a fa1se-certi.fication discharge if he or she received at
least part of an FFEL after January I, 1986, and if the eligibility to borrow was falsely certified by the
schoolJ601
The only three bases for this discharge are that the school
(1) falsifies a non-high school graduate's ability to benefit from the program; (2) enrolls a student

unable to meet minimum state employment requirements for the job for which the student is being
trained; and(3) forges or alters the student loan note or check endorsementsJ611
Disability Dlscharges. A student may discharge a loan if he or she becomes disabled after incuning the loan
obligation or if a preexisting condition has deterioratedJ621 The student must fill out a disability discharge form

and obtain medical certification of disabilityJ631

Other Options. Discharge rights resolve Student loan problems for many clients. Others. however, will fall
between the cracks. For example~ a high school graduate who was not in attendance at a school when it closed
generally does not qualify for a closedschool or false-certification discharge. These students have other
options. State funds may be available to reimburse them. In other cases, a client may be counseled to seek
reasonable and affordable repayment ammgements through either a repayment plan or a loan-consolidation
program./641

II. Family 'Law Advocates: Financial Hardship

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As family law practitioners know all too well, most family law cases involve family dissolution. Divorces. child

custody, and domestic violence are the most common practice areas for attorneys specializing in family law.

'

Consumer law is integral to this p(aCtice in many ways.

Financial distress often causes family breakups. Even if the breakup is not caused by fin~cial problems, the
financial consequences of separation and divorce, particularly for women, are well cI.ocuInented to be severe.
Domestic violence and divorce often make women poor arid can keep them poor as wellJ651
Financial independence is critical for individuals attempting to rebuild their lives after family breakups. Many
of the problems that clients encounter as part of this process, from establishing credit to dealing with debt
collectors, are consumer law issues.

A. Establishing Credit and Credit-Reporting Issues

As already discussed, buying with credit is simply unavoidable for many low-income clients. Credit reports are
a related problem, lind advocates would do well to become aware of the types of problems that may arise arid
the most critical consumer rights and remedies.

of

Ordering Credit Reports. Advocates and clients must familiarize themselves, with the credit-reporting system.
Clients should be encouraged to order their credit reports if possible and to check for errors or inaCcuracies.
Unemployed clients applying for jobs within 60 days and clients receiving public assistance are eligible for one
free report each yearJ661

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Clients also should check to see whether negative infonnation is removed on time. Negative entries may remain
on a report no longer than about seven and one-half years.l671 Bankruptcies more than ten years old may not be
included in a consumer report.l681
Investigation of Errors. The Fair Credit Reporting Act (FCRA) requires credit agencies to investigate
consumer complaints about credit reports at no charge to the con$UUlerJ691 Agencies may refuse to investigate
only if they reasonably believe the request is frivolous or .irrelevant.nOI The investigation must be completed
within 30 days with one extension allowed.nll
Privacy l$sues. In many cases a credit-tePorting problem is linked t() a client's concern about privacy. This is
especially true for many domestic violenCe victims who often tI}', at least temporarily, to keep personal
information, such as addresses and telephone numbers, private from abusers. The danger is that abusers may
attempt to lOCate victims by accessing their credit-report information.n21
The primary safeguard against misuse of credit reports is the provision in the FCRA that allows the release of
credit reports to persons other than the consumer for "permissible purposes" only. In general, permissible
purposes include, but are not limited to, (1) the review or collection of-an existing credit account as well as
initial decision making regarding extension of credit for personal. family. or household purposes;f13J (2) the
review for employment decisions in certain circumstances;l741 (3) the consideration of eligibility for license
or other governmental benefit;l751 (4) the collection of information by public agencies regarding enforcement of
child support awardB;f761 and (5) the use for a "legitimate business" reason in connection with a business
transaction initiated by the consumer.n7!

Because the vast credit-reporting system is difficult to police, information is released often for impermissible
purposes.nSI Employees in companies with credit-reporting terminals can gain easy access to credit files. It
takes only a password to enter a national credit bureau data base from a subscriber terminal. In 9ther cases
someone posing as an employer or claiming to have some "legitimate buSiness need" can access credit files.
Remedies under the FCRA should be considered when a client's personal information is impermissibly
obtained. Reporting agencies can be liable for furnishing reports for impermissible purposes if they are
negligent in furnishing the report or if they are negligent in maintaining reasonable procedures designed to
avoid such reporting.n9J
The FCRA also imposes penalties on those who impermissibly obtain the reports. A civil cause of action may
be lodged against a person who negligently uses or obtains a consumer report for an impermissible purpose.
Furthermore, special sanctions may be placed against any person who obtains the report under false pretenses or
knowingly without a permissible purpose. These persons are liable to the consumer and the conSumer-reporting
agency for actual damages or $1,000, whichever is greater. as well as punitive damages, costs, and attorney
fees. Criminal sanctions also may be fittingJSOI
Civil remedies often are inadequate, leading at best to monetary damages after a consumer's privacy already has
been invaded. The consequences may be particularly severe if a victim's location is discovered. Offenders may
be criminally prosecuted, but here again the damage already may be done. Criminal enforcement of the FCRA.
in any case, is often lax.
As a result, advocates may want to counsel clients to contact the credit-reporting agencies directly to include a

warning in their fues that unauthorized persons may be attempting to obtain their personal information illegally.
Including this warning is similar to a situation where credit bureaus place a "fraud alert" or "security alert" in
credit fUes to tell a .creditgrantor that the consumer has been or is likely to become a victim of fraud, and it may
provide limited protectionJSll
This discussio~ is n9t meant to cause panic but to point out to advocates and clients the possibility for abuse of

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the credit-reporting system. Given the limited effectiveness of the remedies, clients concerned about privacy
should be counseled to flag their credit files if possible and in some cireumstances to avoid applying for credit
altogether for some time.
Dealing with a Negative Credit History. Many clients are less concerned about establishing credit for the

future and more wonied about cleaning up problems from the past A common problem in family law cases
involves a client trying to avoid the consequences of a spouse's, former spouse's, or cosigner's negative credit
history.

Some legal remedies may address this problem. Credit applicants can request creditors to consider infonnation
that the credit'history being considered does not accurately reflect creditworthinessJ82J Applicants can explain,

for example, wby they should not be denied credit because of a poor credit rating attributable to ex-spouses
during marriage.
Most important, in building individJJal as opposed to joint credit, infonnation in a consumer's file should be
only about the CoDsW:ner and not about the spouse or another party. A creditor can request information about an
applicant's spouse or former spouse only in certain limited circumstances Buchas when the spouse is pennitted
to use the account or if the spouse is conttactu.ally liable on the accountJ83/

These remedies do not necessarily help a client who bas numerous joint debts with a spouse orformer spouse.
Clients facing this problem should be advised that riot all negative history can be erased. Clients in fact may be
liable for many joint debts including those for which they cosigncd.
Clients may be able to wipeout most debts and start over by filing for personal bankruptcy184/ With or without
bankruptcy, clients can benefit from a number of practical tips to help establish or reestablish credit
Establishing or ReestabIishlDg Credit. Often the best way to rebuild credit is to start over by opening a
savings or checking account and possibly a charge acCount.

Some important legal rlghts apply to clients rebuilding or building creditworthiness. Most of the relevant
regulations can be found in the FCRA,andlor in the primary credit discrlmination statutes, particularly the Equal
Credit Opportunity ACt (FOA)J8S/
Some clients, particularly women who do not worle outside the home. may have difficulty establishing a
positive credit history in their own name. To address thi& situation the ECOA requireS that creditors designate

any new account to reflect the participation of both spouses if an applicant's spouse is pennitted to use the

account or is contractually liable for itJ8~ This helps both spouses establish a credit histOry in their own

names.

Whether married or single, individuals attempting to establish credit under their own names may not be
prohibited from opening or maintaining an ~ under their birth-given first names or sumamesJ871
Creditors, however, may require that joint applicants designate a single name for purposes of administeriiJ.g the
account.
The ECOA also specifically prohibits creditors from discounting income from certain $()UICCSt such as part-time
employment, historically associated with womenJ88/ In general, marital status may not be considered when
.
looking at creditwoithiness1891
Remedies available under the ECOA include actual and punitive damages, equitable relief, and attorney fees for
successful claimsJ90/ Vjolations also may be brought under state Unfair and Deceptive Acts and Practices
(UDAP) statutes discussed below.

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Credit Repair. Many clients overestimate both the implications of a negative credit history and their ability to
repair itJ9l1

These clients may be particularly vulnerable to the outrageous claims of credit~repair agencies. Generally these
operations do nothing that consumers cannot do for themselves free of charge.
In cases where a client already bas lost money to one of these credit-repair agencies. advocates should consider
suing the company under their state's dDAP statute.andlor under the federal Credit Repair Organization Act
(CROA)J92J The CROA gives clients, among other provisions, a three-day cooling off period after signing a

contract with a credit-repair agencyJ931 The client may cancel the contract during this periOd with no
obligation. and the agency is prohibited from providing any services until the three days have passedJ94/ This
right must be stated clearly in the contract Remedies under the CROA include actual damages. punitive
damages, costs, and attorney fees./9S/ Note that many states also have their own credit-repair laws.

B. Debt Collection

Many clients come aheady mired in debt and facing harassment from the often abusive debt-collection industry.
This type of harassment can be particularly troubling for clients distraUght due to family or domestic violence

problems.
The primary remedies for debt-collection abuse can be found in the federal Fair Debt Collection Practices Act
(FDCPA) and related swe:statutesJ961The IDCPA is a powerful renledy for many10w-income clients. It is
intended to protect debtors from abuse and harassment regardless of whether they legitimately owe the
underlying debtJ97/ A few of the more important provisions are discussed here.
Basic budget and debt counseling is essential for all clients. particularly those facing debt harassment. One of
the most important cOncepts in leaming to prioritize debt payments is the difference between secured and
unsecured debt. Creditors who retain the right to seize property owned by the consumer are usually referred to
as "secured" creditors. Those who do not have this right arc usually referred to as "unsecured." Taking care of
secured debt should be a higher priority because secured creditors have the right to seize the collateral if a client
does not pay the debt. The collateral for a particular debt may be a client's house or car.
The problem is that these basic debt-counseling principles arc hard to remember when a debtor is being
threatened by a debt collector. Debt collectors tend to be most aggressive in pressuring consumers to pay debts
that they should actually pay last, such as unsecured credit card debt. For many people the pressure gets to be
too much, leading them to sign unwise repayment agreements and/or to agree to pay exorbitant lump sums.
Repayment agreements may be the answer for some clients. For many others, particularly those who are
"judgment proof" or who have bigherpriority debts such as mortgages and/or car payments, the best strategy is
to ignore the collectors and cease payments.
The FDCPA ensures that these clientS may stop paying and avoid the harassment by sending to the collector a
letter requesting that they not be contacted any more. The FDCPA requires collection agencies to cease
communication after they receive a written request to stopJ981 Although creditors must cease communication.
they retain 1he right to sue to enforce the debt./99/

Another FDCPA provision that can be useful in the family law context is the right to request verification of any
debt/IOOI and the prohibition against collecting legally unenforceable debtsJI01l This most likely arises w~en.
for example. a collector is attempting to sue one spouse for a separate property debtof the other spouse or In
some cases for the debt of a former spouse. Family law advocates knowledgeable about separate and

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community-property issues must determine first whether the spouse owes the debt. If the spouse does not, the
collector may be violating the FDCPA by attemptiJig to collect a debt not lawfully owedJ102I
Suing for a debt not lawfully owed also may be a deceptive practice in violation of the FDCPA. For example,
courts have found under the FDCPA to be unfair to attempt to collect a debt once the statute-of-limitations
period has runJI031
.
These are a few examples of the powetful possibilities of the FDCPA. Advocates must understand the basic
provisions of the FDCPA, counsel clients on their rights, and raise FDCPA violations defensively in collection
lawsuits or affirmatively to collect damage awards for clientsand attorney fees and to deter violations.

III. Advocates for Immigrants: Navigating an Unfamiliar Environment

Consumer law is of particular importance to new immigrants/lOO both because of their limited economic
resouroes. in general. and because language and cUltural differences often leave them unfamiliar with. and
vulnerable to. many exploitative practices. .
. .

A. Immigration Law and Notsr/o Fraud

Not sulprisingly many sciuns targeted at immigrants are related to immigration law and often play upon
immigrants' fears about their legal status. .
The scammers are often nonattomey legal-service providers. sometimes called notarios. Many falsely claim that
they are attorneys or that they can. curry special favors with the Immigration and Naturalization Service. Others
use titles such as notary public to deceive people into believing they are attorneys. Challenges to these
unscrupulous providers are discussed in the November-December 1997 Clearinghouse ReviewJI0S1

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8. Car Law
For many immigrants the transition from public assistance to wolk translates into a heightened need for
transportation and the purohase of a car. This opens the door to potential abuses by used-car dealers and high
rate lenders and to other car-related consumer problems.

Repossessions. All too often a client does not come to a legal services office until the client's car is about to be
repossessed or, worse, already seized. Although a detailed discussion of repossession is beyond the scope of this
article. advocates should familiarize themselves with the basic requirements of "default" and disposal of
property andhow to use bankruptcY to prevent repossessionJI061

A wide range of consumer warranty and fraud defenses can be raised to revoke acceptance prior to repossession
of a used car; to prevent or reduce a deficiency after repossession. and as sales-related claims in deficiency
actionsJI071
.
Used-Car Fraud. Many used-car dealers have become even more creative in recent years in finding ways to rip
off unsuspecting consumersJi081 A typical used-car sale contains numerous oral and written
misrepresentations. Many of these deceptive practices involve failure to disclose a cats true history. Common
schemes include odometer rollbacks. lemon launderingjl091 and the resale of "salvage" carsJII01 A few rights

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and remedies are discussed below.
A key remedy to challenge used-car fraud is state UDAP statutes. Every state and the District of Columbia have
enacted at least one statute with broad applicability to most consumer transactions aimed at preventing
consumer deception and abuse in the marketplace. Most of these statutes provide for injunctive relief and
damages and, in some cases, attorney feesJlll1
UDAP laws may be used to challenge Unfair, deceptive, or fraudulent practices. In most states a violation of
another statute, such as a statute prohibiting misleading advertising. is a UDAP violation per se. In essence,
many UDAP statutes permit plaintiffs to borrow violations ofother laws and treat them as unlawful or
deceptive practices independently actionable under the UDAP statute and subject to distinct UDAP remedies.
In many cases UDAP causes of action may be brought on behalf of the general public. nus allows classwide

relief without many of the fannal and time-consuming requirements associated with certified class actions.
Used-Car Statutes. An important source of possible UDAP violations is the Federal Trade Commission (Pre)
used-car rules, which require disclosure of certain information in the sale of used cars by dealers and other
covered sellersJU2I
The Spanish disclosure provision of the FTC rtiIes is often relevant to immigrants. When a sale isconducted in
Spanish, the buyer's guide and the contract-language disclosures must be available in both Spanish and
EnglishJl131 If a dealer offers to sell vehicles to some consumers who speak only Spanish and others who
speak English, the dealer must display both an English and a Spanish buyer's guide befote the vehicle is offered
for saleJl141
Another claim that can be made is that a violation of the FI'C rules autOmatically violates the Magnuson-Moss
Warranty Act, which authorizes private actions for damages and attorney feesJl1S1
<

Many other remedies in used-car <casescanilot be discussed in detail because of the limited scope of this article.
Briefly advocates should check their state codes for state used-car lemon lawsJ1161 Other important consumer
rights can be found in the Federal Odometer Act,/1171 which applies when dealers tamper with odometers, and
the Truth in Lending ActJl181
<

C. AffidavIt 01 Support'

Another area that is lihly to have far-reaching consumer consequences for immigrants is the recent interim
regulation requiring most immigrants to submit affidavits of support from sponsors in order to gain admission
.
to the United StatesJ1l91
The form requires the sponsor to support the immigrant at an annual income of at least 125 percent of the
federal poverty line. This support obligation includes reiIilbursetrient of agencies (public or private) that pay
public means-tested benefits to the immigrant during the time of the sponsor's support obligation. Sponsors also
may face lawsuits from the immigrants themselves if they fail to support them at the required level.
A wide range of consumer law issues is likely toarise in this area. First, some questions may be raised about the
enforceability of the new form by agencies andlor by sponsored immigrants. If the form is enforceable, sponsors
need assistance in defending collection lawsuits <and later in dealing with collection methods such as wage
garnishment. Second, eteditors such as landlords may attempt to pursue sponsors for other obligations that are
incurred by sponsored immigrants and that arguably relate to their support. This is a new area, but basic
consumer law concepts such as debt collection. UDAP remedies, and contract enforcement are highly

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relevantJl20l

IV. Conclusion
Legal services clients all share at least two common characteristics-they are all low income, and they are all
COns1lIIlCIS. Consumer law is critical in helping clients shed the fust classification and move out of poverty.
Consumer law remains just as important as clients begin to enhance their incOmes. The rights and remedies
discussed in this article not orily will heip clients move out of poverty but also will help them from returning to
poverty. Advocates can help by tcacbing clients to manage their resoUICes more effectively. minimize expenses.
and avoid the worst Dl8Ilcetplace abuses.

Footnotes1)

IIlFor limits to advice on concealing collateral or hindering enforeement of a security interest see NATIONAL
CONSUMER LAW CTR~, REPOSSESSIONS AND FORECLOSURES Sec. 6.2.3.2 (3d cd. 1995 & Supp.).

121 Housing advocates play an important role also by assisting tenants regarding admisaion to and continued
occupancy in subsidi2;ed ICDtal housing, thereby reducing the housing portion of their household budget.

131 NATI:ONAL CONSUMER LAW CTR.. supra noje 1.

141 NATIONAL CONSUMER LAW CTR.. CONSUMER WARRANTY LAW (1st cd. 1997).
151 NATIONAL CONSUMER. LAW erR., THE COST OF CREDIT ch. 11 (1995 & Supp.)
161 NATIONAL CONSUMER LAW CTR., FAIR DEBT COILECTION (3d cd. 1996 & Supp.).

nl NATIONAL CONSUMER LAW CTR., ACCESS TO UTJLITY SERVICE (1996 & Supp.).
18INATIONAI:CONSUMER LAW CTR., CREDIT DISCRIMINATION (1993 & Supp.); FAIR CREDIT
REPORTING Acr(3d ed! 1994 & Supp.).
.

191 NATIONAL CONSUMER LAW CTR., UNFAIR AND DECEPrivE ACTS AND PRACIICES ch. 11
(4th cd. 1997); SURVIVING DEBT: A GUIDE FOR CONSUMERS ch. 17 (1996). See discussion of student
loans in this article.

1101 NATIONAL CONSUMER LAW erR., CONSUMER BANKRUPI'CY LAW AND PRACTICE (5th ed.
1996 & Supp.);
11l/For an in-depth discussion on how effectively to establish a budget, decide which debts to pay, and make
ends meet see SURVIVIN9 DEBT, supra note 9, cbs.!-3. See also discussion below, "Which Debts to Pay."
I l2lFor information on the available exemptions see FAIR DEBT COLLECTION, supra note 6, Sees. 9.3,
16;1.14. .
.

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I 13/Creditors rarely force the sale of property with little practical value, such as used personal property, even if

it is not protected by exemption laws. This is because the costs of conducting a public sale outweigh the
revenue that would be realized.
I 141Establishing credit and repairing past credit history are discussed below.
11S1 JOHN P. CASKEY, FRINGE BANKING: CHECK-CASHING OUILETS, PAWNSHOPS. AND THE

POOR 12-35 (1994); Louis Jacobson, Bank Failure: The lTmancial Marginalization of the Poor, 20 AM.
PROSPECI' 63 (Wmter 1995).
1161 FEDERAL RESBRVE BD., 1977 CONSUMER CREDIT SURVEY; 1989 SURVEY OF CONSUMER
FINANCES.. See Family Finances in the U.S.: Recent Evidence from the Survey of Consumer Finances, FED.
RESERVE BD. BULL, Jan. 1997. Many banks elimjnated money-losing services such as bank accounts with
smaIl balances. The percentage of banks offering free checking accounts fell from 35 pereent to only 5 percent.
At the sante ,time flat monthly fees and per-chcck fees increased. CASKEY, supra note 15, at 88-89.
1171 CASKEY, supra note 15, at 90-97; David D. Troutt, The Thin Red line: How the Poor Still Pay More,

CONSUMERS UNIO:tl, June 1993, at 62.

118/CASKEY, supra note 15, at 99-100.

1191 COST OF CREDIT, supra note 5, ch. 3.
1201 For a collection of articles written abOuthigh rate lenders see MERCHANTS OF MISERY: HOW
CORPORATE AMERICA PROFITS FROM POVERTY (M. Hudson ed, 1996).
121/CASKEY, supra note IS, at 62; M. Hudson. Robbin' the Hood: How Wall Street Takes from the Poor and

Gives to the Rich, MOTHER JONES (July-Aug. 1994).

1221M. Hudson, Cashing in on Poverty: How Big Business Wms Every Time, NATION. May 20, 1996.
I 23IMERCHANTS OF MISERY, supra note 20, at 2.
I 241Corrina Nicolaou, Our Neighborhood Banks: High-Cost Loans for Low-Income BOIIOwers, CONSUMERS

UNION, July 1997, at 19.

I 25/1d.

1261 MERCHANTS OF MISERY, supra note 20, at 2.

1271 Kathleen Keest, Some Of the Poor Pay Even More: Is There a "Discrimination Tax" in the Marketplace?,
27 CLEARINGHOUSE REV. 365 (Special Issue 1993); MERCHANTS OF MISERY, supra note 20, at 18.

1281 JEAN ANN FOX EI' AL., THE mGH COST OF "BANKING" AT THE CORNER CHECK. CASHER:
CHECK CASffiNO OUTLEr FEES AND PAYDAY LOANS (Consumer Fed'n of Am. Aug. 1997). The report
indicates that the average fees rose by 37 percent to cash social security checks, 44 percent to cash paychecks,
.
and 100 percent to cash personal checks.
129/Id.

1301 California, Connecticut, Delaware, Florida, Georgia, lllinois, Indiana, Kentucky, Minnesota, New Jersey,
New York, Ohio, Rhode Island.

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ee if a particular civil or

/311 If a check casher operates without a required license. check the state Ia~ to ~ng agency for enforcement.
criminal penalty is imposed. Such a check casher should be reported to the hCer gal )iDlit or fails to post
Similar action should be taken if the check casher charges fees higher than the e

required notices.

cbeck cashers surveyed charged

{3'lJ Fox ET AL. supra note 28, at 16. Appendix 3 of this report shows that the to 1826 percent for a 7-day loan
fees producing annual percentage rates ranging from a minimum of 521 percent
and 261 percent to 913 percent for a 14-day loan.
.
. 'l1te required disclosures were
/331 This is clearly an extension of credit, and the Truth-in-Lending Act appliCCrR.. TRUTH IN LENDING ch~
not likely to have been given. See generally NATIONAL CONSUMER LAW, small-loan act. See COST OF
2 (3d ed. 1995 & Supp.). Usually payday loans meet the defInition of the sta~ sed a license, the check casher
CREDIT, supra note 5, Sees. 2.3.3.1,7.5.5. Further, not probably having obUU; 2 4.4. Since most states still
makes the transaction vulnerable to an ar~t that the loan is void. Id. Sec. . liIJlits. Id. Sec. 10.8.
have usury ceiling,s for smaIl loans. these kinds of ~!:es undoubtedly violate tbes~o appropriate. Id.. ch. 11.
Challenges to unconscionability and unfair and deceptive acts and practices are
.
.
derS to similar requirements as
1341 California, Florida. Iowa, Kansas, Louisiana, Minnesota (subjects such len. ton, Wyoming. FoxET AL.
small-loan act lenders, however). Missouri, Ohio, Oklahonul. Tennessee, Was:~OtllPlying and whether any
supra note 28. at 17-20. These statutes should be checked to see if the lenders
remedies are available.
. .
Uchecks). and West Virginia.
1351 Delaware, New Iersey, New York, Virginia (except for government or payro
I361CASKEY, supra note IS, at 42.

1371 This tally includes the District of Columbia, Puerto Rico. and Guam.
.
. laW for an argument that the
1381 In addition to checking the pawn statute for remedies, review state coJ]lfllon9.2.4.4.
loan is void if the statute is violated. See COST OF CREDIT, supra note 5, SeC
139/Severallegal theories can be used

to attack such practices. Id. Sec. 7.5.2.3.

1401 At least four states either added automobile tide into existing pawnbrokCf
Florida. Georgia, Minnesota, and Tennessee.

laW'S or created a special statute:

1411COST OF CREDIT, supra note 5, Sec. 7.5.3.2.

fen ses that still remain to rent-to

14'lJ See compilation of states in id. Sec. 7.5.3.2.2, which also discusses the ~ supra note 9, Sec. 5.7.4.4;

own contracts. See also UNFAIR AND DECEPnVE ACI'S AND PRAcrI
ties Still Exist, (Oct. 1997)

David Ramp, Rent to Own: A Brief History and Discussion, Litigation Oppo
(Sixth Annual National Consumer Rights Litigation Conference Manual).
.
F CREDIT, supra note 5, ch. 11.
1431 Hudson, supra note 21; for defenses to overreaching credit see COST 0
.
.
.
..
'.
an ScaJllS Involving Low-Income
1441 Hudson, supra note 21; Gary Klein, Preventing Foreclosures: SpottJng La
Homeowners, 27 CLEARINGHOUSE REV. 116 (June 1993).
'f1,MES Nov. 18, 1997.
1451Ierry Knight, Poor Without Cars Find Trek to Work Is Now a Job, N.Y
,

rtmrl

1 46IWIS. STAT. Sec. 49.147 (1995).

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1471 Knight, supra note 45.
1481 Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Pub. L. No. 104-193, 111 Stat.

2105 (1996).
1491 Debt Collection and Improvement Act of 1996, Pub. L. No. 104-134, Sec. 31001(x), amending Sec. 31

U.S.C. Sec. 3332.

NEW REQUIREMENT FOR ELBCTRONIC TRANSFER OF ALL FEDERAL PAYMENTS MAY HARM
SOME CONSUMERS (Ian.-Feb. 1997) (National Consumer Law Center (NCLC) Reports. Debt Collection and
ReposscssionsEd.).
1511 Pub. L. No. 104-134. Sec. 31001(x).

1 521Proposed Rules. 31 C.F.R. Sec. 208,62 Fed. Reg. 48713-26 (Sept. 16. 1997). At writing. final regulations

1 S3tro find out how you can get involved, contact Margot Saunders ofNCLC at 202.986.6060 or pteferably by

E-mail. matgOt@nclcdc.org.

1541 See'generally UNFAIR AND DECEPIlVE AcrS AND PRACTICES. supra note 9.
1S5/Note that vocational-school and student-loan problems are also very common among new immigrants.

1S6I Federal Family Education Loans include Guaranteed Student Loans (formerly called "Stafford" loans),
Unsubsidized Stafford loans, Supplemental Student Loans. and parental obligations under the Parent Loan for
Undergraduate Students.
157134 C:.F.R. Sec. 682.402(d)(I)(i). See also 59 Fed. Reg. 22466-69 cmts. 19.43 (Apr. 29, 1994) (a loan is
dischqeable even if part of it was disbursed in 1985. as long as part was.disbursed in 1986).
158/34 C.F.R. Sec. 682.402(d)(1); UNFAIR AND DECEPTIVE ACTS AND PRACt'ICES, supra note 9, Sec.

11.4.2.
159fI'he 1996 list (Clearlnghouse No. S0,421B) can be oiUered from the National Clearinghouse for Legal
Services, 205 W. Monroe St. Chicago, 1L60606. It also is found at Web site http://sfa.ed.gov/TMJT990.
160134 C.F.R. Sec. 682.402(e)(l).
16lJId; UNFAIR ,AND DECEPTIVE ACTS AND PRACI1CES, supra note 9, Sec. 11.4.3.
162134 c;F.R. Sees. 682.402(c)(11), 68S.212(b) (for direct loans).

1 63/UNFAIR AND DECEPTIVE ACTS AND PRACTICES. supra note 9. Sec. 11.4.S.
164/ Id. Sec. 11.3.

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1501A major challenge for advocates is to ensure that the consumer protections found in Regulation E of the
Electronic Fund Transfer (EFT) Act, 15 U.S.C. Sec. 1693. or similar consumer protections, are applied to all
EFT accounts. This will help ensure that recipients are protected, e.g., if they need to lq)lace a card, correct
eaors, or IeCOUP losses after a cud isl08t or stolen. Although states are not required to provide Regulation E
protection for stato-eatablished or -administered "need-tcsted." electJ:Onic benefits transfer programs, they may
choose to do so. Pub. L. No. 104-193. III Stat. 2105 (1996). See NATIONAL CONSUMER. LAW erR.

were 'not yet available.

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I 651See. e.g., Melanie Shepard & Ellen Pence, The Effect of Battering on the Employment Status of Women, 3

AFFILLlA SS (1988); Martha F. Davis & Susan 1. Kraham, Protecting Women's Welfare in the Face of
Violence 22 FORDHAM L. REV. 1141, 1153 (1995) (Women's escape from violence in their own homes is
depende~t, to a great extent, on available financial resources).
166115 U.S.C. Sec. 1681j(c). Consumers can ask also for a free copy of their credit report if within the past
sixty days they were denied any application because of that report. 15 U.S.C. Sec. 1681j(b).

The three major credit-reporting agencies ate Equifax. Experian (formerly lRW), and Trans Union. To be safe
clients should order a report from all three. The Fair Credi~ Reporting Act (FCRA) prohibits any company fro~
charging more than $8 per report. Fees are set even lower In some states. For specific information on how to
order reports see FAlR CREDIT REPORTING ACT. supra note 8, Sec. 3.5.2.
I 67fThe basic seven-year reporting period for information may begin no later than 180 days after the
delinquency itself, thereby totaling about seven and one-half years. The limit applies to any item added.to a
consumer's reporting agenCy file afler December 30, 1997. IS U.S.C. Sec. 1681c(c).
168JId. Sec. 1681c(a)(l).
I 6911d. Sec. 168li(a).
1701ld. Sec. 168li(a)(3) ..

17111d. Sec. 1681i(a)(I).

/72/No specific data show the extent to which information is obtained impermissibly about domestic violence
victims. However. a recent Public Interest Research Group study documents the wide accessibility of personal
financial information and related legal and illegal invasions of personal privacy. See U.S. PUB. INTEREST
RESEARCH GROUP, TBEFI' OF IDENTITY: THE CONSUMER X-FILES (Sept. 1996).
173/15 U.S.C. Sec. 1681b(a)(3)(A).

I 7411d. Sec. 1681b(a)(3)(B).

I 7511d. Sec. 1681b{a)(3)(D).

176/Id. Sec. 1681b(a)(4).

177/Id. Sec. 1681b(a)(3)(F). Before 1996 the business transaction was not necessarily limited to those initiated

by a consumer.
I 78/See U.S. PUB. INTEREST RESEARCH GROUP" supra note 72; Marcia Vicker, Stop, Thief! And Give
Me Back My Naine, N.Y. TIMES. Jan: 28,1996, Sec. 3, at 1.
..

I 791Pr0ving damages in FCRA casesjsoften difficult For a consumer to recover for a defendant's negligent
failure to comply with the FCRA. the consumer has to prove actual damages resulting from defendant's failure
to comply with an FCRA requirement Damages, such as pain and suffering or humiliation. can be intangible in
nature. See generally FAIR CREDIT REPORTING ACT, supra note 8.

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180115 U.S.C. Sec. 1681q-r. See generally FAIR CREDIT REPORTING ACT, supra note 8.
I 811 These "fraud flags," however, are considered ineffective by many in the identity-theft context, and
agencies are not required to comply. See U.S. PUB. IN'IEREST RESEARCH GROUP, supra note 72. Further,
agencies do not yet set aside these mes for special handling or use their technological capabilities to screen out
information. See generally FAIR CREDIT REPORTING ACT, supra note 8, Sec. 5.6.4.5.
I 821Reg. B, 12 C.F.R. Sec. 202.6(b)(6)(ii).
I 83/Id. Sec. 202.5(c)(1)-(2).

I 841An extensive discussion of bankruptcy is beyond the scope of this article. Advocates are urged to consider
carefully the bankruptcy option for many clients. See generally SURVIVING DEBT, supra note 9;
CONSUMER BANKRUPTCY LAW AND PRACTICE, supra note 10.

185/15 U.S.C. Sec. 1691 et seq. See generally CREDIT DISCRIMINATION, supra note 8.

I 861 Reg. B, 12 C.F.R. Sec. 202.10(a)(l).

I 871Id. Sec. 202.7(b).

I 881Id. Sec. f?2.6(b)(5).

1 89/Id. Sec. 202.2(z). Marital status is a prohibited basis for discrimination under the Equal Credit Opportunity

Act but not under the Fair Housing Act or federal civil rights acts.

1 901 See generally CREDIT DISCRIMINATION, supra note 8, ch. 11.

1911F0r a general discussion of the implications of a negative credit history see SURVIVING DEBT, supra

note 9, ch. 6; FAIR CREDIT REPORTING ACT. supra note 8.

192115 U.S.C. Sec. 1679-1679j.

1931 Id. Sec. 1679d.

1 941Id.

195IFAIR CREDIT REPORTING ACT. supra note 8, Sec. 13.2.

1961 Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. Secs. 1692 et seq. See generally FAIR DEBT
COLLECTION, supra note 6.

I 97/Note that the FDCPAdoes not apply to everyone collecting a debt. In particular, it does not apply to
creditors collecting their own debts(e.g., a department store collecting for a purchase made at that store
generally is not covered). However, they might be covered under a state debt collection statute. For a list of
state debt collection statutes see FAIR DEBT COlLECTION, supra note 6, app. L. The FDCPA applies only to
collectors whose principal business is collecting debts and who do so regularly as defined in the FDCPA (15
U.S.C. Sec. 1692a(6. Note that attorneys regularly collecting consumer debts also must comply with the

FDCPA. The FDCPA applies only to consumer debts (15 U.S.C. Sec. 1692a(5.

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198115 U.S.C. Sec. 1692c(c).

1991 The letter need not give any special explanation why the creditor should cease contacts. Nevertheless,
clients gelleral1y would do well to explain why they cannot pay and whether the situation is likely.to change.
The letter also may describe prior abusive tactics of the collector's employees and the resulting distress. Clients
always should keep copies of the written request.
1100/15 U.S.C. Sec. 1692g.
1101IId.. Sec. 1692f(1).
1102/1d.
./1031 FAIR DEBT COll..ECTION, supra note 6, Sec. 5.5.1.8.3.
11041N0te that the tenn "immigrant" as used in this section refers to newcomers to the United States. The

category includes citizens and noncitizens, English speakers and non-English speakers. Most of these clients

can still be assisted by programs funded by the Legal Services Corporation despite the recent cuts and

restrictions. See Alan Houseman, What cannot Be Done by Programs Receiving LSC Funds (Center for Law

and Social Policy, May 29, 1997).

1105lDeanne Loonin. Kathleen Michon & David Kinnecome, Fraudulent "Notarios," Document Preparers and
other Nonattorney Service Providers: Legal Remedies for a Growing Problem. 31 CLEARINGHOUSE REV.
327 (Nov.-Dec. 1997).

1106JREP0SSESSIONS AND FORECLOSURES. supra note 1.

1107lId.. Sec. 12.8.1, 12.8.2.
1108INote that these problems do not by any means occur exclusively in immigrant communities.
Transportation is a problem for many low-income clients and will become increasingly important as more and
more former public-assistance recipients search for transportation to get to new jobs. See Knight, supra note 45.
11091 Lemon laundering is a manufacturer's practice of reselling a car returned as a lemon without informing
the purchaser of the cars repair history.
.

/1101 This scheme occurs when cars deetped "total losses" ("salvage" cars) by insurance companies are resold
by dealets' without disclosing -the prior history to the purchaser. For more information on all of these schemes
and legal challengcssce CONSUMER WARRANTY LAW, supra note 4, ch. 14; UNFAIR AND DECEPTIVE
_ACI'S AND PRACTICES. supra note 9, ch. 5.

i 111IUNFAIR AND DECEPTIVE Acrs AND PRACTICES, supra note 9.

/112116 C.F.R. Sec. 455.
11l3IId.. Sec. 455.2.
I 1141N0te that some states also have statutes that provide for rescission of contracts under certain
cin::umstances where Spanish translations are not provided.. See. e.g., Cal. Civ. Code Sec. 1632 (Deering 1994).

1115/15 U.S.C. Sec. 2310(d).

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?116lNew-car lemon laws also may be relevant, although most legal aid clients are not n a financial position to
purchase a newcar. For a listing of state new-car lemon laws see CONSUMER WARRANTY LAW, supra
4, app. F. For a discussion of used-car lemon laws see id. See. 14.6.
1117/49 U,S.C. Sees. 32701-11. The entire Motor Vehicle Information and Cost Savings Act is codified at 15

U.S.C. Sees. 1901-91. NAll0NAL CONSUMER LAW erR. ODOMETER LAW (3d ed. 1992 & Supp.).
1 118JNAll0NALCONSUMERLAWcrR.. TRurH IN LENDING, supra note 33.
1119/62 Fed. Reg. 54346 (Oct. 20, 1997). Final regulations were not available at writing.

II2OJFor a detailed discussion of the affidavit-of-support provisions see Catholic Legal Immigration Network
& National Immigration Law Ctr., Affidavit of Support and Sponsorship Requirements: A Practitioner's Guide
(1997). To find out about ordering a copy. write the network at 564 Market St.. Suite 416, San Francisco, CA

94104.

374