Olympia - In a joint announcement today, Helen Howell, Director of Financial Institutions, Attorney General Christine Gregoire, and Insurance Commissioner Mike Kreidler announced a nationwide settlement with Household International and its subsidiaries, Household Finance Corp. (HFC) and Beneficial Finance Corp.
The state officials said that home owners who were overcharged by Household International will share in a $484 million dollar settlement to be divided among all states taking part. In addition to paying restitution to consumers nationwide, Household agreed to pay millions of dollars in costs and administration expenses associated with the settlement, and to comply with 24 separate restrictions upon their business practices.
Howell said the Department of Financial Institutions (DFI) became concerned with the lending practices of Household and Beneficial in late 1999. The investigation began in earnest in 2000, including interviewing consumers, research into federal law, an examination of Household and Beneficial records, several meetings with the senior management of the company, and a supplemental examination that included secretly shopping several branch offices to document predatory practices.
The conclusions of DFI’s investigation were documented in a supplemental examination report that was issued in April of 2002. After the issuance of the report, DFI helped initiate the nationwide effort leading to this settlement.
"This agency is a national leader in fighting predatory lending," said Howell, "and we intend to keep the pressure on companies and individuals who victimize consumers and violate their rights. This joint effort by our Attorney General, Insurance Commissioner, and Department of Financial Institutions is a great example of how state agencies are working together to protect the people of Washington," she added.
Howell said that thousands of Washington consumers are likely to be affected by the settlement, but she pointed out that administration of the settlement will be a long and complicated process. As a result, DFI is unable to inform consumers at this time whether they will or will not be included in the settlement, or whether or not they are entitled to restitution. The agency does not expect to be able to provide such information to consumers for up to several months.
The Department of Financial Institutions has placed information on its website (www.dfi.wa.gov) to inform consumers about the current status of the settlement. In addition, a toll-free number (1-800-450-1003 ) has been set up for consumers to call and hear a recording giving the latest developments. The recording will be updated regularly, and consumers should continue to check it and the agency's website for details.