State Attorney General
"Protecting against predatory lending and overly aggressive debt collection in the gaming industry is critical, because the odds are stacked against the patron being able to earn back the value of the loan," wrote Coakley, who is also a candidate for governor. "This practice by the gaming industry in which customers' homes are put at risk should not be allowed."
Coakley cited an article in Sunday's Globe that detailed the longstanding practice by the two large
Casino industry specialists have said it is unusual for a gambling business to employ property liens as a collection tactic. "This story highlights the need for a robust set of consumer protection regulations before these establishments begin operations," Coakley wrote.
Many casinos offer credit to gamblers, as a convenience for big players who would be uncomfortable traveling with huge wads of cash.
Gambling companies have access to credit bureaus to determine if the player has the financial resources to cover the advance.
When a casino approves a credit line, a player signs what is essentially a check for the amount loaned.
If the loan is not repaid before the customer leaves, the casino will cash the check and the money will be drawn from the player's bank account. If the account is short, however, the check will bounce.
Since the early 2000s,
State law will allow the state's casinos to extend gambling credit to customers, under rules established by the
The commission has not yet written those rules and procedures, but that task is coming up: The panel intends to place the issue on the agenda of an upcoming meeting, the commission's spokeswoman,
In Coakley's letter, she offered the commission her office's expertise to help "in crafting regulations that effectively protect consumers, while allowing businesses to operate fairly in the marketplace."
Coakley said in an interview Monday that for many people a home "is the one place they have any equity or any assets."
Liens, which accrue 12 percent interest a year, cloud the title to properties, affecting a homeowner's ability to sell or refinance.
"We are concerned it would have a very negative impact here if people incur debt and this practice is permitted," Coakley said.
She believes that if casinos cannot chase debtors with property liens, they may be more conservative in lending.
Leaders of an effort to repeal the state's 2011 casino law called Monday for the commission and lawmakers to hold hearings on the credit and collection policies of the casinos.
"This is a shining example of the many facets
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