Commerce and Community

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By Errol Louis

Avoid Bank Rip-offs
New York banks have a very bad habit of instantly freezing customers’ accounts when collection agencies come looking for assets to grab.
Seizing the money amounts to a financial death sentence for thousands of working people who instantly lose access to their paycheck, their retirement income and their savings – cash that may be needed for transportation, medicine, rent and other necessities.
That happens whether they’ve really dug themselves into debt or whether there’s just been a terrible mistake.
One day, an account may have a few hundred dollars. The next, it can be frozen with a negative balance in the thousands.
It isn’t fair to treat people that way. In many cases, it’s not even legal.
When someone gets into debt and loses in court, state law gives the city marshals and other debt collectors a powerful tool called a restraining notice. It amounts to a court order requiring a bank to seize the account of a person with a judgement against them.
But a host of other state and federal laws specify that banks aren’t supposed to just freeze every last penny in an account: certain kinds of funds are exempt.
Federal safety-net benefits like Social Security, SSI and welfare payments can’t be taken. Neither can 90% of a customer’s salary for the last 60 days.
Pension and retirement funds can’t be seized. Child support dollars are protected, too.
But in practice, there’s mounting evidence that most banks are simply ignoring the law and freezing 100% of a customer’s account upon receipt of a restraining notice – even when it should be obvious that certain electronic transfers, like Social Security and payroll deduction, are legally off limits.
Use of the freezes exploded after 2000, when collection agencies won the right to send out restraining notices by e-mail, allowing creditors to hit every bank in the state with the push of a button – making it all the more important for banks to do their homework before seizing accounts.
If you think your bank has improperly frozen federal benefits, pension money, child support or a recent paycheck, show this article to the customer service people – and invite them to take a peek at Chapter 38, Section 5301 of the United States Code, which specifies which benefits “shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever.”
You should also call the Neighborhood Economic Development Advocacy Project, which operates a hotline for frozen-account victims at (212) 925-4929.
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The Silent Majority Speaks Up
Shortly after the Village Voice gave its Best Noble Failure Award to Develop Don’t Destroy Brooklyn, the anti-development coalition fighting to stop the Atlantic Yards project, a letter to the paper summarized the feeling of many Brooklynites about the fight.
“Some of us in Brooklyn agree that Goldstein’s group is a failure, but for a completely different-and less noble-reason,” wrote Dan Ross. “I view Goldstein and his absolutist views as responsible for the failure of the opposition to Atlantic Yards.
“While his organization is called Develop Don’t Destroy, it should have been called Don’t Develop Brooklyn. It never engaged in a serious effort to negotiate the size and bulk of Atlantic Yards and permit a reasonable development of that long-neglected neighborhood to go forward.
“There’s no way to know whether a good-faith effort to negotiate a scaled-back version of Atlantic Yards might have succeeded, but Goldstein’s absolutist opposition made serious negotiation impossible. You might as well blame him for the fact that Atlantic Yards will proceed as planned without any real community input.”
Well said, Mr. Ross.
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Activist in Need
Elombe Brath recently had a stroke, which threatens to silence the voice of one of the city’s most educated and eloquent activists. Brath’s wife, Nomsa, has issued an appeal for $10,000 needed for holistic medical care not covered by traditional HMOs. Checks can be made payable to Elombe Brath and should be sent to Elombe Brath, 1845 Adam Clayton Powell Blvd., Apt. 6C , New York, NY 10026.
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Full Ride to College
The Tom Joyner Foundation has announced full scholarships for high-achieving students applying to Historically Black Colleges and Universities (HBCUs). Graduating high school seniors can apply for the scholarship by going to BlackAmericaWeb.com ( http://www.blackamericaweb.com/site.aspx/foundation/fullride).
The scholarships will cover full tuition up to 10 semesters and provide stipends to cover books, room and board. To be eligible, students must be U.S. citizens and high school seniors with a minimum grade point average of 3.5 and minimum SAT score of 1300. Applications must be postmarked by May 1, 2008.

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