Magazine article Mortgage Banking

Expect Compromise on Final Anti-Predatory Lending Bill

Magazine article Mortgage Banking

Expect Compromise on Final Anti-Predatory Lending Bill

Article excerpt

EXPECT SOME SORT OF COMPROMISE MEAsure to result from two competing and recently filed anti-predatory lending bills, but any legislation that does not include a uniform national standard will be a non-starter, according to a key House staffer.

When Reps. Bob Ney (R-Ohio) and Paul Kanjorski (D-Pennsylvania) drafted the Responsible Lending Act following months of closed-door, bipartisan consensus-building, they expected that the bill eventually designated H.R. 1295 would undergo significant reworking as they consulted other members of Congress and mortgage industry leaders, including MBA, Jason Spence, Ney's legislative counsel, told attendees at MBA's Non-Prime Lending and Alternative Products Conference.

"The Ney-Kanjorski bill is a very good foundation for addressing this problem, and that's what we were aiming for," said Spence. "We weren't aiming on this draft that's currently out there to solve the problem in this one draft. We really wanted to get a starting point ... a good solid foundation."

Filed within days of each other in March, Ney-Kanjorski (H.R. 1295) and the Prohibit Predatory Lending Act (H.R. 1182), introduced by North Carolina Democrats Reps. Brad Miller and Melvin Watt, both expand the scope of HOEPA, the federal law regulating high-cost home loans.

The key difference between the bills is that under Ney-Kanjorski, the uniform national standard would pre-empt state and local predatory lending laws, while Miller-Watt--based on North Carolina's landmark predatory lending law--would tighten HOEPA while permitting states and localities to maintain their own abusive lending restrictions.

Note: MBA Chairman-Elect Regina Lowrie earlier told Ney's subcommittee that MBA considers Ney-Kanjorski the "superior bill" because pre-emption would lift the serious compliance burden faced by lenders grappling with a patchwork of state and local lending requirements (see Mortgage Banking, July 2005, Business Alert, p. …

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