Kia Franklin

Politicians Focus in on Predatory Lending

It looks like consumer protection, and specifically a focus on predatory lending, is the new “it” in politics, as representatives from across the country and across partisan lines are beginning to see its growing importance to the American public, and its increasing significance to the economic security of the middle and working classes.

Members of the House of Representatives plan to introduce a bill that targets predatory lending practices by limiting mortgage finance charges, banning prepayment penalties and requiring a lender to verify a borrower’s ability to repay a loan. This AP article discusses the bill:

The bill comes less than a week after Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services panel, offered legislation that would set up a national registry of mortgage brokers and other loan sellers.

Among other things, Bachus’ bill would require loan originators to submit to a criminal background check and fingerprinting, and would ban loan originators recently convicted of fraud from the registry.

U.S. lawmakers and consumer groups have criticized federal banking regulatory agencies for being slow to protect consumers from predatory lending practices and fraud involving home loans and credit cards.

Rep. Barney Frank, the Massachusetts Democrat who heads the Financial Services panel, wants to pass legislation by the end of 2007 to deal with the subprime crisis and predatory lending. He is expected to introduce his own bill in coming months…

On the campaign trail, the latest of John Edwards’ continued focus on poverty is his call yesterday for a national law to crackdown on predatory lending. He went to “the nation’s poorest big city,” Cleveland, to discuss the questionable lending practices that affect hard-working people every day:

Edwards chatted on a porch with homeowner Glenn Curry, 57, who said his home was close to foreclosure because of his wife’s medical bills, a cut in his hours as a school bus driver and a refinancing that he described as predatory.

Edwards also called for a national fund to provide assistance to working people at risk of losing their homes.

In Census Bureau rankings released last August, 32.4 percent of Cleveland’s 452,200 people were living below the poverty level. Cleveland’s median household income of $24,105 was the lowest among large cities.

These efforts are a key component of civil justice—the better regulated these industries, the fewer the violations of consumers’ rights, the less they will have to seek redress through the court system.

Posted at 11:20 AM, Jul 18, 2007 in Permalink | Comments (0) | TrackBack (0)