Largest Direct Consumer Restitution In Washington
Thousands of Washington homeowners who were overcharged for home loans issued by Household International will share millions of dollars in one of the largest direct consumer restitution cases in U.S. history, Attorney General Christine Gregoire announced today.
In addition to restitution, the settlement requires the Illinois-based company, whose subsidiaries include Household Finance Corp. (HFC), to change lending practices in what Gregoire said she hopes will set a new standard of conduct for the so-called sub prime home lending industry.
Among the most significant requirements of the settlement, Gregoire said, is a requirement that Household and its subsidiaries ensure that consumers actually benefit – usually in lower payments or lower overall interest rates – from new loans.
Nationwide, Household will pay up to $484 million in consumer restitution – including up to approximately $20.6 million to Washington consumers – to settle a multi-state investigation into alleged predatory lending practices by the company.
In announcing the settlement today in Seattle and Bellingham, Gregoire was joined by state Insurance Commissioner Mike Kreidler and by Helen Howell, director of the state Department of Financial Institutions (DFI).
In addition to restitution for consumers, Gregoire said she hopes the settlement “will begin to clean up the unlawful, unethical and unconscionable lending practices that occur all too often in the sub prime lending market today.”
“Home ownership is one of America’s most treasured dreams, but Household’s lending practices turned that dream into a nightmare for many here in Washington and across the country,” Gregoire said. “We trust that this settlement will transform Household into a model for other lenders to follow.”
Earlier this year, the companies refunded nearly $1 million to Washington borrowers after DFI(Department of Financial Institutions) uncovered overcharges under the Act.
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