BILL OFFERED BY CONGRESSMEN MILLER, WATT, AND FRANK TAKES THE RIGHT APPROACH TO ADDRESSING PREDATORY MORTGAGE LENDING
FOR IMMEDIATE RELEASE
April 19, 2005
Allen Fishbein, CFA
Washington, D.C. -- The Consumer Federation of America today commended Reps. Brad Miller (NC), Melvin L. Watt (NC) and Ranking Member Barney Frank (MA) for their leadership in introducing HR 1182, the "Prohibit Predatory Lending Act." HR 1182 takes the right approach to addressing the growing problem of predatory lending. CFA urges others on the Financial Services Committee and in Congress to support the indispensable protections to vulnerable consumers afforded by the provisions in this bill.
At a time when subprime lending has become the fastest growing segment of the mortgage market, too many families are being victimized by a stream of abusive lending practices. Predatory mortgage lending strips borrowers of home equity they may spend a lifetime building, threatens thousands of families with foreclosure and thus potentially turning the dream of homeownership into a nightmare.
"The Miller/Watt/Frank bill if enacted would drive a stake into the heart of abusive lending," said Allen Fishbein, CFA's Director of Housing and Credit Policy. He added, "The bill in a very precise and effective manner eliminates incentives for lenders to make predatory loans, while preserving access to justice for families caught in abusive loans.
HR 1182 is patterned after the landmark 1999 North Carolina anti-predatory lending law that has curbed many abusive practices. Mr. Fishbein offered, "It makes sense for Congress to use the footprint provided by the North Carolina law because it has been proven to work to curb abusive lending without reducing the availability of appropriate forms of mortgage credit."
HR 1182 also deserves support because the bill preserves the long-standing federalist approach to enforcement - providing for stronger federal consumer protections while preserving the flexibility for individual states to continue to protect their citizens. Mr. Fishbein said, "the interests of consumers are best served when both federal and states' protections complement one another to provide the broadest possible safety net for vulnerable consumers who are at risk of being victimized by predatory lenders."
Consumer Federation of America is a national non-profit association comprised of 300 national, state, and local organizations formed to support consumer interests through research, public education, and advocacy.