The minimum payment to Iowans will be $100, and the highest is $5,768, Miller said. Most payments are in the $100-$500 range, and payments average $523.61.
Miller was the lead attorney general in a nationwide case in which states alleged that Household misrepresented loan terms
and failed to disclose key information to borrowers. "Late last year, Household agreed to pay $484 million in consumer
restitution nationwide, the largest direct restitution amount ever in a state or federal consumer case," he said.
"Now we are getting the money back to consumers. Iowa's share of the settlement is over $1.5 million, which also is the
largest direct consumer restitution ever in Iowa. Most important, payments are going to people in 2,886 households we
alleged were harmed by the company's practices. Owning a home is part of the American dream, but some consumers
found that dream turning into a nightmare," he said.
Miller said that consumers complained that Household charged far higher interest rates than promised, charged costly
prepayment penalties, or deceived consumers about insurance policies. "We alleged that some consumers were trapped in
costly loans by some of the practices," he said. "These payments help remedy that damage."
Most of the checks are being issued today by the third-party settlement administrator located on the West Coast. A few
more checks will be issued over the next 2-3 weeks.
Miller advised consumers to carefully read the letter accompanying their checks, because the payments could have
important impact on their taxes or their SSI eligibility:
*Income tax notices: For some participants, the payment income may be taxable. The settlement check may include one or
more federal tax forms (Form 1099-Misc, or Form1098). Whether the payment is taxable varies on people's situation, and
they should take the forms to a tax preparer or tax advisor when they prepare taxes. Many communities also provide
volunteer income-tax-assistance centers for lower-income Iowans at tax-preparation time.
* SSI recipients: For recipients who are on SSI (Supplemental Security Income), the mailing also includes important
information about how the payment may affect eligibility. Iowa Legal Aid can help explain the situation and answer
questions. Call 1-800-532-1503 or 1-515-243-1193 between 9-11:30 a.m. and 1:30-3:30 p.m. Monday through Friday.
People who prefer assistance in Spanish should call 1-800-272-0008.
People with other questions relating to the processing of claim forms should call the settlement administrator at 1-888-780-2156.
Iowans who have complaints or questions about possible predatory lending
practices by other companies may call the Attorney General's Consumer
Protection Division at 515-281-5926, or visit the web site at
www.IowaAttorneyGeneral.org (click on "protecting consumers.")
All fifty states and the District of Columbia ultimately participated in the settlement concluded last December with
Household International, one of the country's largest sub-prime lenders and parent company of Household Finance
Corporation and Beneficial Finance Corporation. In August, eligible customers were notified and offered the opportunity
to opt in to the settlement by a deadline of October 14, and 2,886 Iowa households filed to participate.
Payments in Iowa range from the $100 minimum up to $5,768, depending on the borrower's specific loan situation and
factors such as credit insurance, points, prepaid penalties, loan-to-value ratio, and size of their loan.
Under terms of the settlement, Household also agreed to implement a series of reforms in its lending operations. Court
injunctions now in place in Iowa and all 50 states restrict prepayment penalties on loans, prohibit loan "flipping" (a practice
that strips equity from people's homes and can lead to loans that exceed the value of a home), limit up-front points and
origination fees, and improve loan disclosures.
"I'm elated that money is going out to Iowa consumers," Miller said. "This is a landmark case. Household is making $484
million in payments, and has changed the way it does business. This is a major blow for fairness in the marketplace,
especially for low- and moderate-income Iowans seeking to fulfill the dream of home ownership."
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