SACRAMENTO, Kalifornia (PNN) - October 5, 2012 - The National Bank of Canada is attempting to foreclose upon hundreds of Amerikan families’ homes in Kalifornia over old credit card debts, according to a published report.

The bank’s debt collection unit, Credigy Receivables, began filing foreclosure lawsuits recently that take advantage of a loophole in Kalifornia’s laws that lets them go directly for a debtor’s home even if that property was not offered as collateral for a loan.

Jurgens explained that one of the people targeted by the new legal tactic is 71-year-old Helen Jones, an Oakland resident who lived in her home for 37 years before Credigy sued in 2010 over $1,636 in credit card debt her ex-husband ran up. She claimed the bank offered to settle the debt and drop the foreclosure for $7,000, and that she ultimately paid them $3,800 just to get it all handled.

They can get away with this because Kalifornia has left the relatively new practice of third parties buying and selling debts virtually unregulated, creating legal space that lets banks go directly after valuable assets that were never offered as security for loans.

Kalifornia State Senator Mark Leno filed a bill in 2011 called the “Fair Debt Buyers Practices Act.” which sought to make third party collectors log the transactions that led to a consumer’s debts, rather than today’s common practice of purchasing a list of names and numbers without supporting information that proves the debt.

That bill passed the Kalifornia Senate, but was relegated to a quiet death in an assembly committee after banking industry lobbyists voiced concerns.

The buying and selling of debts on the consumer level arose in the 1990s, after President Bill Clinton signed a banking deregulation bill that allowed the merger of the consumer and investment banking sectors and enabled the creation of credit default trading on Wall Street.

That market was worth $62 trillion in 2008, but grew to more than $708 trillion by the end of June 2011, according to the Bank for International Settlements, which noted that the total value represented 18% growth in just the first half of 2011. The World Bank says the global gross domestic product was $69.97 trillion in 2011, up from $21.9 trillion in 1990.

The Dodd-Frank Wall Street Reform and Consumer Protection Act sought to address the financial chaos caused when debt-backed derivative bubbles collapse, which was one of the key factors leading to the 2008 financial crisis that nearly put the global financial system into complete gridlock. However, new regulations issued by Obama’s Consumer Financial Protection Bureau only seek to limit derivatives speculation in certain industries, like food and oil, leaving many of the illegitimate president’s own allies - including the Federal Reserve Bank of Dallas - to say that the bogus regime’s landmark reforms didn’t go far enough.

In spite of the limited effort, a federal judge in Washington struck down the derivatives regulations just last week, ruling on a lawsuit brought by the financial services industry.