CAPITOL Education loan companies hit with subpoenas BY MICHAEL GORMLEY The Associated Press
New York Attorney General Andrew Cuomo said Thursday he has subpoenaed 33 companies and lenders who market education loans directly to college students in widening his investigation of deceptive tactics in the industry. After launching a probe of college-sponsored lending, Cuomo said he is now investigating independent lenders and marketers who solicit business from students and families, often implying they are part of the federal government or affiliated with a college. “This is a new front,” he said. A pitch made by telephone, broadcast ads, online ads, mail and direct sales can “sound like it’s coming from the federal government. It will look like it’s coming from the federal government and it’s, we believe, a deceptive practice. And it’s a very big industry.” Investigators will try to determine if consumers paid higher interest rates or fees to the companies because of their practices, said Cuomo spokeswoman Rashmi Vasisht. Cuomo spokesman Jeffrey Lerner said the investigation will seek to determine how high the rates offered by the companies are. “We know that many of these companies were offering rates which were higher than rates you could have gotten in the market place,” Cuomo said. He had no specific rates, but said even a couple of percentage points difference could cost a borrower thousands of dollars over the life of a loan. To entice students,some of the companies offered gift cards of up to $500 to customers, used fake checks and rebates, provided $100 gift cards to recruit other students, and advertised $25,000 and $50,000 sweepstakes, Cuomo said. He said some lenders and loan “middle men” were also deceptive about the conditions for repaying loans. “We want parents and students to be aware,” Cuomo said. Some big names in the student loan industry received subpoenas Thursday. Most didn’t immediately respond to requests for comment and most of those that did, including Nelnet/Education Planning & Financing and Wells Fargo, had no comment because they said they were just beginning to review the subpoenas. First Marblehead Corp. said it received its first subpoena from Cuomo in the case in August. “There have been no further subpoenas,” said Janice D. Walker, spokeswoman for Marblehead based in Boston. “Neither the First Marblehead Corporation or its proprietary brands were identified as having participated in the marketing practices outlined” by Cuomo Thursday.
ALBANY Cuomo program to target crime in capital city BY BOB CONNER Gazette Reporter Reach Gazette reporter Bob Conner at 462-2499 or bconner@dailygazette.net.
Mayor Jerry Jennings and state Attorney General Andrew Cuomo announced a partnership Thursday that they said would help revitalize Albany and cities across the state. At a City Hall news conference, the longtime political allies announced that Albany will be the first place to get the benefi ts of a new Cuomo program, “Nowhere to Hide,” which is part of his ongoing Guns, Gangs and Drugs Initiative. Investigators and lawyers from the Attorney General’s Office will take legal action against Albany landlords who permit their properties to be persistently used for criminal activities. Jennings said the attorney general’s program would tie in with the city’s new “Block by Block” initiative, which a statement from the mayor’s office said is “designed to target abandoned and vacant buildings, absentee landlords, quality of life issues, building and code enforcement, crime suppression, increased home ownership and investment, and neighborhood revitalization.” The program will be focused on four of the poorest Albany neighborhoods: Arbor Hill, the South End, Park South, and an area including parts of West Hill and Pine Hills. Jennings said he is creating a city Division of Neighborhood Revitalization, which will try to reduce the number of abandoned buildings. City Police Chief Jim Tuffey said Block by Block will not be a short-term program, but rather “an extensive effort over an extended period of time.” It will involve key city departments and be coordinated by the police chief. Jennings said the city would be trying to bring in public and private funding to address and reverse blight in the targeted neighborhoods, but is not planning to deprive other areas and programs of needed resources. “This doesn’t take away from anything else,” he said. “These programs represent a change in philosophy,” said Albany County District Attorney P. David Soares, a sometime political rival of the mayor’s who has strong support in the minority community. Soares, who spoke at the news conference, called the two initiatives “a pro-active, problem-solving” approach to reducing crime and blight. Jennings, Cuomo and Soares are all Democrats. The party has had control of Albany City Hall for several generations. Cuomo said government has had a tendency “to address these problems in silos,” meaning separately. In reality, he said, housing, education and other issues need to be addressed along with crime, in order to turn around inner-city neighborhoods. And in an apparent slap at the Republican Bush administration, Cuomo said cities can’t look to Washington for help. In upstate New York, the attorney general said, “there is a plague of guns, gangs and drugs,” with problems often migrating from New York City. But he expressed confidence that those problems can be dealt with, and concluded his speech by saying, “The best days of Albany lie ahead, not behind us.” Jennings said the city is having success with projects such as the Sematech research facility at the University at Albany main campus, and the redevelopment of downtown. It also has been addressing neighborhood issues, he said, including in Park South, but acknowledged that much more needs to be done. These new programs, the mayor said, will do much more to turn neighborhoods in the right direction.
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