Local Leaders, Senator Unite to Fight Predatory Lending
Dailey, John, Walter, Shane, Nation's Cities Weekly
The National League of Cities joined Senator Paul Sarbanes (D-Md.), chairman of the Senate Banking, Housing and Urban Affairs Committee, at a press conference May 1 to support the senator's fight against predatory lending.
NLC First Vice President John DeStefano, mayor of New Haven, Conn., and Mayor Rudolph McCollum of Richmond, Va., represented NLC to emphasize the importance of affordable credit in low and moderate-income communities.
"Predatory lenders go out seeking their victims," DeStefano said. "We don't have to take this. We don't have to accept this."
Sarbanes released a report by the Center for Community Change on the prevalence of sub-prime lending in the mortgage refinance market.
Allen Fishbein, legal counsel for the Center for Community Change, presented the report's findings and explained that sub-prime lending is taking place across the country and that the percentages for minorities and the elderly is much higher than for the overall population.
McCollum, whose city has an African American majority population, has seen the slant in percentages first hand.
"What I find most alarming and disturbing is that upper level income African Americans have a higher percentage of sub-prime loans than lower income level whites," McCollum said.
Sarbanes introduced new legislation, The Predatory Lending Consumer Protection Act of 2002 at the press conference.
The proposed measure strengthens current law by closing the gaps in the Truth-in-Lending-Act ("TILA") and the Home Equity Protection Act ("HOEPA").
The bill would refine the definition of high-cost mortgages and outline key protections for minorities and elderly borrowers.
The bill would also increase statutory damages in civil and class-action suits against offending lenders, prohibit lenders from making high-cost loans without providing the borrowers information regarding risks or counseling, require disclosures related to risks and require that a creditor report annually both favorable and unfavorable payment history of borrowers to credit bureaus. …