Goldman Sachs, at it again......

[marmar]

Goldman Sachs' New Loan Program Enters Underregulated, Potentially Abusive Loan Marketplace

Thursday, 20 August 2015 00:00
By Yana Kunichoff, Truthout | News Analysis


In the heady and panicked months following the financial crash of 2008, the US government bailed out a handful of the United States' biggest financial institutions. Among those were the investment banks Goldman Sachs and Morgan Stanley, which together received bailouts and loans totaling over $100 billion.

Among the terms of the bailout was that they both become bank holding companies, which meant they had the authority to own banks. While this may seem like an expansion of influence, the move has actually placed the previously independent investment banks under new regulation and supervision. It also opened the door for the companies to enter further into consumer lending than they could have as traditional investment banks.

This summer, news broke that Goldman Sachs would be taking advantage of its "bank holding company" designation to branch into the online loan market. According to The New York Times, which reported the story on June 15, the bank will be moving to offer loans of a few thousand dollars through a yet-to-be-launched online portal.

.....(snip).....

Predatory Lending Practices

The personal loan business - where money is received in a lump sum, with fixed monthly payments - can encompass both long- and short-term credit products and are often marketed heavily to financially vulnerable consumers.

The most infamous of short-term or installment lending products are payday loans, which are sold to consumers as quick-fix borrowing but often carry interest rates upward of 300 percent and use tactics frowned upon by the Consumer Financial Protection Bureau, including using vehicles as collateral or failing to underwrite for affordable payments.

Neither Goldman Sachs nor the Consumer Financial Protection Bureau replied to requests for comment. ...............(more)

http://www.truth-out.org/news/item/32433-goldman-sachs-new-loan-program-enters-underregulated-potentially-abusive-loan-marketplace

[dixiegrrrrl]

1. Speaking of predatory loan practices........

Just got notice that Green Tree mortgage servicing is merging with...Ditech. as of Aug. 31.

Ditech was purchased by GMAC Mortgage in 1998, and then acquired by Cerberus Capital Management, before later being purchased by Walter Investment Management Company in 2013.
Walter owns Green Tree, a former collection agency which morphed into a mortgage servicer after the banks found the new rules ( thanks to Warren) too onerous to continue servicing mortgages, so banks sold them off, a lot to Green Tree, and to Nationwide.

Three major lenders (and many smaller ones) went down during the recent housing crisis, including Countrywide, IndyMac, and GMAC.

Today, they’ve morphed into Bank of America/PennyMac, OneWest Bank, and ditech, respectively.
and they are making sub-prime loans all over again!

[Octafish]

2. Sounds like a plan for more Indentured Feudalism.

As for Djuan Wash, he's nearing a payment of over $1,500 on his original loan of $500, and he is still paying. "If I had to do it all over again I certainly wouldn't have taken out a loan," Wash said. "They don't give a damn that I can't pay my bills because of their [wage] garnishment."

Money.