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Press
Release Contact:
Friday, December 1, 2000
Frank Torres/David Butler
(202) 462-6262
Consumers
Union's Washington, DC Office
WASHINGTON, D.C. -- Consumers Union (CU) today
criticized banking regulators for allowing Citigroup Inc, the
nation's largest financial service company, to purchase Associates
First Capital Corp. without requiring strict policies to prevent
abusive lending.
Despite Associates' reputation as one of the
worst predatory lenders in the United States, regulators permitted
the purchase without acting to protect consumers from being sold
loans that are unfairly priced or they cannot afford.
Citigroup announced last month that it would
voluntarily adopt policies to help guard against problems in its
subprime lending divisions. But CU believes Citigroup's voluntary
actions fall far short of adequate protection.
Frank Torres, Legislative Counsel for CU, made
the following statement:
"Citigroup got an early holiday present from
banking regulators, who deserve lumps of coal in their stockings for
failing to protect consumers.
"Subprime lenders such as Associates are able
to sell high-interest loans to consumers with virtually no regulation
at all. In spite of all of the horror stories from victims of
subprime lending, the regulators were unwilling to stand up and
require consumer protections as a prerequisite of this deal.
"The regulators have now opened the door to
more mergers like this one, which just demonstrates why Congress
needs to pass predatory lending laws."
Consumers Union, publisher of Consumer Reports magazine, is an independent, nonprofit testing and information-gathering organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
