NM AG Calls For B&C Policies, Procedures

New Mexico State attorney general Patricia Madrid has sent letters to more than 150 subprime lenders to see if they have adopted consumer protections spelled out in a 2002 settlement with Household Finance International.Acting on behalf of the National Association of Attorneys General, AG Madrid said the "historic" Household settlement established new consumer protections for the subprime lending industry. "The information I have requested will help us determine if these consumer protection standards are being followed by the other members of subprime lending industry," she said. Ms. Madrid is vice chair of NAAG's subprime lending working group. The state AG wants lenders to spell out their policies and procedures to prevent abusive lending, including their compliance and monitoring efforts to ensure borrowers are not being charged excessive fees and points. "I believe it is in the best interests of borrowers and lenders that we all work together to eliminate predatory practices in the subprime lending industry. Your written response by Aug. 22, 2005 will be greatly appreciated," Ms. Madrid said in the July 18 letter. In October 2002, Household entered into a $484 million settlement with state regulators for overcharging loan customers and agreed to restrictions on its business practices. Household was later acquired by HSBC Holdings.