Don’t fall victim to aggressive marketing when it comes to borrowing money.
Some lenders offer products that are not in your best interest.
They may fail to explain, or explain only in “fine print,” the terms
of the loan contract. Some lenders may try to sell you loans with
unwarranted high interest rates. Beware of loans such as single
“balloon” mortgages payday loans, auto title loans, rent-to-own
arrangements, or tax refund anticipation loans. These types of loan
products could put you in a worse financial situation than where
you started. See the Policy Statement below for a list of loan characteristics
to watch out for and avoid. Don’t be fooled!
The Don’t Borrow Trouble El Paso (DBT) Campaign is here to help you
make informed financial decisions when seeking a loan. The campaign aims to:
Read through our website – it was put together by a coalition of professionals
from the non profit, credit union, and legal fields. We hope that you will find
the information useful in making sound financial decisions for you and your family.
- Educate you about the dangers of predatory loans
- Help you identify these predatory loans
- Link you to resources that may help you with your situation
We have also organized free legal clinics for people with questions on mortgages,
foreclosures, consumer loans, credit cards, and basic bankruptcy. These free
legal clinics are held once a month at the Texas RioGrande Legal Aid office
located at 1331 Texas Ave. from 5:30 p.m. – 7:30 p.m. For a list of upcoming
legal clinic dates and for more information about how you can obtain free legal
advice from an attorney, click on the Download Flyers page.
This is a public service campaign at no cost to you. Don’t Borrow Trouble
campaigns have begun in over 40 cities throughout the country. Freddie Mac,
a Government Sponsored Enterprise, or GSE, (http://www.freddiemac.com) is the
primary sponsor of the campaign.
Please visit the Make Your Voice Heard in El Paso page before you leave!
All the partners in the Don’t Borrow Trouble El Paso campaign
have signed the following policy statement. To find out more about
our partners and the services they offer, click on the Partners
The Don’t Borrow Trouble Campaign (“DBT”) is committed
to combating predatory lending practices in the El Paso region through
consumer education and consumer awareness. Its immediate primary objective
is to provide information and education to consumers and homeowners
so that they can make sound decisions regarding their finances and
lending options. DBT is a campaign designed to strengthen the financial
capacity of the community and thus prevent unscrupulous lenders from
taking advantage of uninformed and/or vulnerable consumers. Predatory
lending practices consist of various financing and loan products that
negatively affect consumer’s financial health. While “predatory
lending” may have many definitions, the following examples and/or
characteristics illustrate the nature of the practice:
As a member of the Don’t Borrow Trouble Campaign and on behalf of the
organization/company listed below, I affirm that predatory lending is harmful
to the community and that I support DBT’s effort to educate the public
regarding predatory lending. I also affirm that my organization/company and
I support DBT’s commitment to combat predatory lending practices in the
El Paso region.
- High interest rates and fees which are not substantiated by the borrower’s
- Short minimum loan term with rollover loan at additional cost
- Single balloon payment loans. In situations where single payment loans
are used as interim financing, this may be a fair option—consideration
of all of the loan terms should be examined in making this decision.
- Loan flipping where the borrower goes into the transaction agreeing to
a certain loan product and ends up with another less favorable loan product
- No consideration of borrower’s ability to pay
- High deferred check fees and charges
- Mandatory arbitration clause in loan agreements
- Circumventing state laws to charge more fees or interest
- Steering credit worthy borrowers to sub-prime loans
- Charging discount points which do not lower the interest rate or lower
the monthly mortgage payment for the borrower
- Adding undisclosed products to loans as a condition of the loan such as:
Credit Life Insurance, Credit Card Accident and Health Insurance,
or substandard warranties (products such as the ones mentioned
should never be made conditions of the loan)
- Abusive Pre-Payment Penalties on loans
- Targeting borrowers to aggressive sales tactics. Many times, these borrowers
come from vulnerable groups such as minority populations, the elderly, young
adults, and persons who are not financially sophisticated.