States policymakers are on the front lines in seeing and addressing the problems that people face in making ends meet. Below is a list of common consumer problems coupled with state-based policy solutions and links to more in depth resources.
ACCESS TO JUSTICE
Companies use fine-print forced arbitration clauses as a get-out-of-jail free card to prevent accountability when they violate the law. State Solutions:
Enact private attorney general statutes and other nonpreempted measures.
BANKING
Banks reap billions in profits from overdraft and nonsufficient funds (NSF) fees from struggling families. State Solutions:
Cap fees for state-chartered banks at $5, ban NSF fees, and prohibit abusive overdraft practices.
CARS
Cars are essential but consumers face opaque and inconsistent pricing that includes junk products. Creditors can engage in self-help repossessions without court oversight, endangering the public without giving consumers a fair chance. State Solutions:
Bring transparency to add-on sales by providing a cooling-off period and up-front pricing.
Make repossessions fairer and safer by ensuring a consumer’s right to cure default prior to repossession.
COERCED DEBT
Survivors of domestic violence are frequently victims of economic abuse, such as when abusers use the survivor’s ID or the threat of abuse to obtain credit. State Solutions:
Prohibit collectors from collecting coerced debt, suing, or reporting the debts to the survivor’s credit report.
CREDIT REPORTS
Credit reports are full of errors, include data that unfairly penalizes consumers, and reinforce racial disparities. Employers, landlords, and insurers use credit history despite little evidence of predictiveness for those purposes. State Solutions:
Ban medical debts from appearing in credit reports.
Restrict the reporting and use of credit history for employment, tenant screening and insurance.
Require the translation of credit reports into at leastfive languages.
CRIMINAL JUSTICE
Fines and fees are regressive and unaffordable taxes on millions of low-income families. Public and private actors engage in predatory practices targeting justice-involved people and their families, jeopardizing successful reentry and impeding public safety. State Solutions:
Eliminate unaffordable fees, including those charged by private companies, and reduce and cap government revenue from fines and fees.
End debt-based driver’s license suspensions.
Remove criminal justice debt as a barrier to record clearing.
DEBT COLLECTION
See more problems and solutions here
Consumers face deception and harassment by debt collectors. Millions are sued. Post-judgment, creditors
may garnish bank accounts or wages, often leaving consumers without enough money for basic family expenses. State Solutions:
Strengthen protections against abusive collection practices.
Amend laws and court procedures to inform consumers about alleged debts.
Facilitate court participation by consumers without attorneys.
Protect income needed for necessities.
ENERGY INSECURITY
See more problems and solutions here
Working families are struggling to heat and cool their homes and keep the lights on. State Solutions:
Enact discount rates or Percentage of Income Payment Plans for consumers at or below 60% to 80% of median Income.
EQUITY & RACIAL JUSTICE
Consumers of color are subject to predatory and discriminatory practices in credit and housing markets. State Solutions:
Enforce state consumer protection, disability, and fair lending laws to ensure consumers have access to housing and non-discriminatory credit.
HIGH-COST CREDIT
See more problems and solutions here
Predatory lenders trap borrowers in unaffordable debt. State Solutions:
MANUFACTURED HOUSING
Owners of homes in manufactured home communities do not own the land, leaving them vulnerable to rent increases and disinvestment in roads, sewers, and other infrastructure. State Solutions:
Require community owners to maintain the property and treat homeowners fairly, and give the homeowners the opportunity to purchase the land if the community owner decides to sell it.
MEDICAL DEBT
See more problems and solutions here
Millions struggle with medical bills and often face aggressive collection practices that further harm their financial security and health. Too many are unaware of financial assistance or struggle to gain access. State Solutions:
Expand financial assistance requirements and screen for eligibility.
Prohibit predatory collection practices like credit reporting, garnishment, and home liens.
Prohibit medical payment products from using predatory practices like deferred interest.
Stop nursing home debt collection against third parties.
PRESERVING STABLE HOMEOWNERSHIP
Low-income homeowners, especially older homeowners and those in communities of color, face an elevated risk of home loss due to property tax foreclosure, heirs property risks, and equity theft scams. State Solutions:
Improve property tax foreclosure protections.
Protect owners of heirs property from threats posed by disasters, speculators, and Medicaid Estate Recovery.
Prevent abuses through contracts for deed and home equity investment loans.
RENTAL HOUSING
See more problems and solutions here
Low- and moderate-income renters face a shortagevof affordable housing, spiking rent, and abuses by corporate and private equity landlords. Junk fees, rental debt, and inappropriate tenant screening practices contribute to these problems. State Solutions:
Require landlords to adopt individualized screening criteria solely focused on assessing ability to pay and suitability for tenancy.
Bring enforcement actions to combat unlawful junk fees and tenant-screening practices.
ROBOCALLS
Fraud and harassment from robocalls and texts plague consumers. State Solutions:
Enact state laws governing the service providers who process illegal calls into the U.S. system.
UNFAIR, DECEPTIVE AND ABUSIVE PRACTICES (UDAAP)
The creativity of predatory actors has no bounds, and flexible state laws that prohibit unfair, deceptive and abusive practices are critical, yet many laws have big loopholes. State Solutions:
Strengthen state UDAAP laws to ensure broad coverage and to eliminate impediments to enforcement.
Questions? Contact Michael Best ([email protected]).
See all resources related to: Access to Justice, Auto Finance & Sales, Banking, Payments & Remittances, Consumer Protection Regulation, Consumer Protections for Tenants, Credit Reporting & Data Fairness, Criminal Justice, Debt & Bankruptcy, Energy, Utilities & Telecommunications, Equity & Racial Justice, High-Cost Credit, Homeownership & Foreclosure, Robocalls & Texts