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Discussing changes in the financial services sector

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Discussing changes in the financial services sector. Put particular focus on major changes in banking laws, how the Internet is impacting the industry, industry consolidation, and international banking.

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Changes in banking laws:
Haysom said recent changes in banking and bankruptcy laws had also contributed to the jump in lis pendens filings and other troubling economic indicators.

Bankruptcy made tougher

Last year, Congress amended the bankruptcy laws, effectively barring most homeowners from filing a "Chapter 7" bankruptcy that would shield them from much of their debt and allow them to start over. Instead, these families must now file "Chapter 13" bankruptcies, which allow them to keep their homes only if they can refinance their debt and keep making the payments.

Haysom said many families can't do this because they are saddled with credit card debt that is rising faster these days because of other changes in the banking law. Prior to 2005, he said, debtors who had "maxed out" a credit card were permitted to pay as little as 2 percent of the outstanding balance each month without being declared delinquent. Now the minimum payment on most cards is 4 percent.

"That may not seem like much of a difference," he said. "But if you were paying your 2 percent on two or three cards, suddenly your credit card payments have doubled."

Haysom said credit card companies have raised interest rates to as high as 35 or 40 percent for those with shaky credit ratings, and they typically tack on substantial penalties for late payments.

"This is an appalling form of lending, and debtors are essentially defenseless," he said.

Haysom, Rodelli and her clients all agree the only way out of trouble is to find ways to curb spending.

"You learn what's really important when you go through something like this," the woman from Pleasant Valley said. "We don't have our home any more, but we have all ...