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Soldiers get $92M in debt relief under settlement

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Thirteen states have settled an investigation into improper lending with a court agreement that is expected to provide $92 million in debt relief for 17,800 U.S. military personnel.

State Attorney General Greg Zoeller said the settlement will erase $1.5 million of bad debt for 261 military members from Indiana.

Deceptive practices by Rome Finance Co., more recently doing business as Colfax Capital Corp. and Culver Capital LLC, based in California and Georgia, included failing to accurately disclose charges and interest rates, New York's Attorney General Eric Schneiderman said Tuesday. Authorities also alleged the lenders helped retailers inflate prices, with repayments taken from soldiers' paychecks.

Authorities say military personnel will keep financed merchandise like computers and gaming systems with debt forgiven, including $2.2 million for more than 550 New York residents.

The federal Consumer Financial Protection Bureau also investigated. The states involved are Colorado, Delaware, Florida, Georgia, Kentucky, Indiana, Iowa, Massachusetts, Michigan, New York, North Carolina, Tennessee and Vermont.

Signed settlement documents were filed last month in federal bankruptcy court in California. The lending companies filed for reorganization in 2008 in a case that was converted last year to a liquidation proceeding.

"Rome Finance lured service members in with the promise of instant financing on expensive electronics, then masked the finance charges with inflated prices in marketing materials and later withheld key information on monthly bills," said Richard Cordray, director of the Consumer Financial Protection Bureau. "Today, their long run of picking the pockets of our military has come to an ignominious end."

Jeremy Katz, attorney for the bankruptcy trustee, declined to comment Tuesday about the announced settlement. He said the bankruptcy case isn't over yet.

 

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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