Household Finance is changing its ways - and paying an enormous sum in
restitution to consumers. This is the largest direct restitution amount
ever in a state or federal consumer case, totaling up to $484 million
nationwide, depending on how many states participate - and it looks like
almost all states will participate.
Iowa's share - based on Iowa Household customers' share of Household's
overall loan volume nationwide - is expected to be about $1.3 million.
Household has roughly a thousand customers in Iowa. Restitution terms
and arrangements remain to be determined over the next few months, depending
on what practices by Household harmed which consumers in Iowa. (Consumers
do not need to call Household or the Attorney General's Office at this
time. There will be notification and public information after determinations
are made on how to allocate restitution.)
This is a landmark decision for Iowa and the nation. We alleged that
Household violated state laws by misrepresenting loan terms and failing
to disclose material information to borrowers. We believe that some consumers
were virtually trapped in expensive loans by some of these practices,
and were unable to refinance elsewhere at reasonable rates.
The cooperative work by state attorneys general and state financial regulators
in this case has been extraordinary and unprecedented - and it has yielded
This is a major blow for fairness in the marketplace, especially for
lower-income Iowans involved in the paramount goal of home ownership.
We were very pleased with Household's cooperation, we are gratified by
what this means for consumers, and we are very optimistic that this will
be viewed as a landmark in improving consumers' treatment by the subprime
[End of Tom Miller statement.]
* Iowa Attorney General Tom Miller is the lead attorney general in the
nationwide Household working group. He led the announcement of the settlement
Friday morning in Chicago, Household's home area. Miller is the Chair
of the Subprime Lending Committee of the National Association of Attorneys
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