The Sides of Lending EquiCredit Corp. Knows 'Predatory' Line a Fine One

Article excerpt

Three months ago, Helen Eggers was toasting the ongoing introduction of Bank of America's new red-white-and-blue corporate symbol. Today, she probably needs a couple of aspirins.

Back then, her job was director of branding communications, presenting the best public face of America's biggest commercial bank, before being promoted to president of BofA's Jacksonville-based EquiCredit Corp.

Yesterday, the Chicago City Council passed an ordinance designed to curb "predatory lending practices," the first city in the nation to do so.

It is unlikely to be the last.

The Chicago vote puts Eggers at the uncomfortable intersection of issues that touch on poverty and class, race and social equity, business risk and profit.

The burgeoning debate on how to stop abusive and deceptive lending practices stretches from Boston to Oakland, Calif., via Washington, D.C., has drawn in state and congressional legislators, not to mention Alan Greenspan, chairman of the Federal Reserve, and any number of advocacy groups.

And Eggers, the branding expert, has an additional challenge. EquiCredit faces having its speciality, subprime lending, re-branded as predatory lending.

EquiCredit is one of the biggest players in the business of lending to people who, for whatever reason, do not qualify for the lowest rates on mortgage loans or who have bad credit. Lenders call it the "subprime" market, as opposed to the segment of the market that qualifies for the best rates.

Eggers prefers the term "risk-based lending" and is exasperated that increasingly, the terms "subprime lending" and "predatory lending "are being used interchangeably.

"I think it is very clear to us that risk-based lending, unfortunately, has been too easily confused with what we would describe as abusive and deceptive practices," said Eggers, who grew up in St. Petersburg and started with Bank of America in the early 1980s as a credit specialist, before moving into marketing.

Predatory lending is not an easy term to define. Federal regulators have declined to do so, although they have identified practices ranging from loan flipping, where borrowers have to refinance their loans many times, to selling single-premium insurance policies without their knowledge. …