Thursday, October 17, 2013

Dr. Lachin Hatemi: Is M&T Bank overcharging black customers in overdraft fees?


By Lachin Hatemi M.D.


 (To be published by www.yourblackworld.com)



The U.S. Census Bureau lists Buffalo, New York, as the third poorest city in the United States; however, news about poverty is nothing new in the Western New York region. The cycle of poverty has continued in some parts of Buffalo for generations, and the city’s poverty rate remained stuck at about 31 percent based on 2011 data. 

In 2008, the United Nations released a report named “State of the World’s Cities” in which the Buffalo-Niagara Falls area was cited as having one of the worst rates of racially-based economic inequality in the world.  In addition, the Census Bureau also released information placing the Buffalo-Niagara metro area, as the 8th most segregated region in the United States.

Coincidentally, Buffalo is also home to the one of the largest and most profitable regional bank in the Unites States – the Manufacturers and Traders Bank (M&T Bank). M&T was established more than a century ago when Buffalo was a bustling city.

Despite Buffalo’s declining fortunes, M&T Bank somehow prospered during the same period. Since 1980, M&T had experienced an annual compound growth rate of 19.8%. Only a handful of other companies in the entire nation had done so well for so long. It is a well-known fact that the one of the richest man in the world, Warren Buffet, long admired M&T’s current chief executive officer, Robert Wilmers. Buffet occasionally talks to Wilmers, and Buffet’s investment company Berkshire owns 4.1% of the M&T Bank’s outstanding stocks. Warren Buffet loves M&T Bank for a good reason – it had dominated the No. 1 position among local deposit-takes in the Western New York area. Based on data from June 30 2013, M&T Bank has 47.2% of all the bank deposits in the Buffalo/Niagara region.  
  
But a big question remains unanswered: How can a regional bank serving the poorest and most segregated cities of Western New York and the East Coast yield such record profits?

The magic answer is the “overdraft fees” and victims of this crime are the low-income customers. A $37-$38 overdraft fee can make a difference between buying groceries and facing hunger for a low-income single mother with kids who lives in the dilapidated neighborhoods of Buffalo. Burden of overdraft fees are disproportionately on the poor urbanites. Those living paycheck to paycheck are more likely to overdraw their deposit accounts.

Moebs reported that U.S. banks made a whopping $31.5 billion in 2012 despite stricter federal regulations enacted since 2010. One of the most recent federal regulations governing the overdrafts fee was Dodd-Frank Act of 2010, which tried to prevent predatory overdraft affecting the poorest segments of the population.

Dodd-Frank Act simply mandated banks to do something that sounds like a no-brainer – obtaining a customers’ consent before signing them up for “overdraft services” that many customers never asked for in the first place. The federal law also describes how such consent can be obtained to ensure transparency.

Official Commentary published by the Federal Reserve further describes the consent methods which are defined as reasonable: providing the customer with a written form which can be signed in person at a bank branch is one of them. Consenting via internet or phone was also suggested as acceptable alternatives, but such methods were less likely to be used by the poorest customers. Given that most low-income customers are not comfortable with Internet banking, consenting in writing remains the most viable method.

To my surprise, M&T Bank obtains consent verbally without any reproducible proof of the transaction. There is no record of the verbal consent and how the customer was asked to consent by the bank employee. There is no paperwork, no accountability, and no proof of the consenting process for overdraft fees in person. Surprisingly, M&T does not provide a standard written form, which you can fill out to give consent for overdraft protection. You simply cannot consent in writing at M&T Bank even if you request it.

This shocking revelation prompted me to contact some high level executives at M&T Bank since I coincidentally live in Buffalo where M&T has its headquarters.

On October 7, 2013, I personally met with Joseph Lombardo, Vice President of Consumer deposits, and Rich McCarthy, Senior Vice President of M&T bank’s retail branch network. My primary goal was to discuss the facts and observations that I shared with you in the preceding paragraphs. My conversations with the two high-level bank executives confirmed my worst fears. M&T does not provide its customers a standard form to consent for overdraft services in writing which might be a gross violation of the Dodd-Frank Act. I think this matter deserves close attention from the respective federal banking regulators.

Nobody is above the federal law. M&T bank’s lawyers should read the Dodd-Frank Act one more time with utmost attention and comply with it.

Lachin Hatemi is a physician in Buffalo, New York. His interests include human rights, patient’s rights and interfaith dialogue. You can reach Lachin at Lachinhatemi@gmail.com. 

Sunday, October 13, 2013

New Washington Post Investigation Tells the whole Story about Property Tax Liens



A new ground breaking investigation by Washington Post tells the whole story. Here is why companies like Tax Ease Liens should be banned from buying property tax liens in Kentucky and Ohio.

To read more about the Washington Post Article Please click on the link below.


Tuesday, October 8, 2013

City of Logan cuts a deal with Texas-based Property Tax Lien Investor- Tax Ease Liens.



 Authored by Lachin Hatemi M.D.

City of Logan in Ohio is also cut a deal with Texas Based company- Tax Ease Liens. Hocking county treasurer Diane Sargent agreed to sell 512 property tax liens to the Tax Ease Liens

Founded in 2003, Tax Ease is an investment company focused on working with state and local taxing authorities to provide millions of dollars in revenue by paying the tax obligations of delinquent debtors.
At least 14 counties in Ohio are participating in this program, including Ashtabula, Belmont, Delaware, Clinton, Fairfield, Gallia, Morrow, Montgomery, Licking, Portage, Shelby, Marion, Summit and Tuscarawas.
According to Sargent and previous county treasurer Kay Cook, this is the first ever tax lien sale of this kind in Hocking County.

We expect these numbers to increase. If you receive a collection letter from a collection agency or Attorney regarding your delinquent property tax bill, we would love to hear about it.

Contact me at lachinhatemi@gmail.com and share your story.


Tuscarawas County in Ohio joins forces with Tax Ease Liens


        Authored by Lachin Hatemi M.D.

The city of New Philadelphia in Tuscarawas county is one of many quiet and friendly cities in the state of Ohio. Recently some of the homeowners in Tuscarawas county received a letter from city treasurer regarding delinquent real-estate taxes.

City declared that they reached an agreement with Texas Based company Tax Ease Liens to sell the property tax liens if they left unpaid. This is a development that homeowner should really concern about.

We have been following Tax Ease Liens for couple years now. They are known to saddle small property tax liens with exorbitant attorney fees. Do not surprise if you get a letter from Tax Ease Liens attorney asking for thousands of dollars to satisfy your delinquent property taxes.

If you get that letter, please contact me at LachinHatemi@gmail.com and remember you are not alone.

Tax Ease lien will proceed to foreclose on your property if you do not take that notice seriously.

If your property is sold in a foreclosure auction, any proceeds will first go to the Tax Ease liens to pay their crazy attorney fees. So do not take them lightly, take action to fight back.