Consumer groups weigh in on fears about subprime lenders

WASHINGTON — A coalition of consumer and civil rights groups says it plans to launch a national campaign Tuesday to highlight what they consider abusive and predatory lending practices in the banking, credit card and mortgage industries.

The coalition, Americans for Fairness in Lending, is made up of the Consumer Federation of America, Consumers Union, the NAACP, the National Council of La Raza, and other organizations.

While the group is not focusing on specific companies, mortgage banks that specialize in lending to consumers with weak credit have seen their stock prices plunge in recent weeks —in one case by 69 percent in a day — as concerns mount about increasing defaults and the potential market and economic impact.

The coalition also plans to criticize a range of practices, including offering credit cards to unemployed college students and others unlikely to afford paying the debt, and the levying of excessive fees for late credit card and other payments.

The group has also targeted tax preparers that offer rapid refunds as well as “payday lenders” and other fast loan providers that charge “ridiculously high rates.”

“Two decades of … deregulation have allowed banks, credit card companies, mortgage companies, auto financiers and other lenders to make their own rules and abuse consumers,” the group said in a news release. “Practices that used to be called ‘loan-sharking’ are now legal.”

Kirsten Keefe, executive director of Americans for Fairness in Lending, said the group would like to see stronger regulation and better disclosure of fees and costs.

The group will launch its Web site Tuesday and is planning a print and radio advertising campaign, Keefe said.