Household International Shareholders Oppose Predatory Lending

Press Release
For Immediate Release - May 3, 2001
Contact: Molly Lanzarotta
(617) 423-2148 x39

Household International Shareholders Oppose Predatory Lending

"On the predatory lending side, some people have done unethical things. We don’t do that."

– Bill F. Aldinger III, CEO, Household International,
in the Chicago Sun Times

The executive officers of the oldest and largest consumer finance company in the country, Household International, have made public statements committing to business practices free of predatory lending. Yet since North Carolina passed the first state law banning predatory lending in 1999, Household International has been second only to Citigroup in predatory lending complaints to the state’s banking commission.

Shareholders will present a resolution at Household International’s annual meeting on May 8 in Brandon, near Tampa, Florida, which would create a mechanism for evaluating the company’s officers in meeting their stated commitments and would offer positive incentives for ending predatory lending practices and ensuring fair treatment of customers.

Predatory lending refers to the misleading packaging of high fees, costly credit insurance and other charges into loans to unsophisticated borrowers. These loans are often compounded by refinancings that, instead of benefiting borrowers, primarily generate fees for lenders.

Household International and other lenders have steadfastly opposed attempts by cities and states to regulate the sale of high-fee, high-interest loans known in the industry as subprime. A recent report by the Treasury Department and Department of Housing and Urban Development states that "evidence from a number of cities demonstrates that foreclosure actions have grown at a disturbing rate in inner city neighborhoods." According to HUD,
subprime home loans rose nationally from 100,000 in 1993 to 1 million in 1999, most often in predominantly black neighborhoods.

"The purpose of this resolution is to focus the company on a key issue of business risk, as well as to break through the denial regarding abuses in the subprime industry," says Julie Goodridge, president of Northstar Asset Management and the Household International shareholder who will present Responsible Wealth’s resolution at the annual meeting.

PHOTO OPPORTUNITY: Homeowners who have been victims of predatory lending and members of the advocacy group ACORN will gather for a sidewalk demonstration outside Household International’s shareholder meeting on May 8 at 9 o’clock.

Responsible Wealth has also filed shareholder resolutions on executive compensation at six other companies: Disney, FleetBoston, Citigroup, Exxon Mobil, Raytheon, and AT&T. The texts of the shareholder resolutions can be found at www.responsiblewealth.org.

Responsible Wealth, a project of United for a Fair Economy, is a growing network of businesspeople, investors and affluent Americans in the top 5 percent of income and wealth who work to promote widely shared prosperity. United for a Fair Economy is a national, independent non-profit that spotlights growing economic inequality and inspires action to narrow the wage gap.

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