Predatory Lending Bill to Be Introduced in Senate
Shrum, Scott, Nation's Cities Weekly
Senate Banking and Urban Affairs Chairman Paul Sarbanes (D-Md.) is expected to introduce the "Predatory Lending Consumer Protection Act of 2001" to combat the increasing problem of abusive lending that threatens to undermine efforts to revitalize neighborhoods and expand home ownership opportunities across the nation.
Several states and municipalities have already undertaken initiatives to counter predatory lending.
Predatory lending is the practice where lenders take advantage of homeowners by marketing loans with excessively high interest rates or hidden fees, regardless of the borrower's ability to repay. These lenders often target the most financially vulnerable homeowners, including the elderly and low-income individuals.
The Predatory Lending Consumer Protection Act of 2001, which is similar to a measure (H.R. 1051) introduced by Rep. John LaFalce (D-N.Y.), would expand the number of loans subject to Home Ownership and Equity Protection Act (HOEPA) protections, while enhancing consumer protections for HOEPA borrowers, including a limitation on prepayment penalties and a prohibition on balloon payments. …