Anti-Predatory Lending Bill Gets

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CUNA has sent a letter to the Senate Banking Committee expressing its support for Predatory Lending Consumer Protection Act, which would amend the Home Ownership Equity Protection Act (HOEPA) to protect consumers against predatory practices.

In the letter to Senate Banking Committee Chair Paul Sarbanes (D-MD), CUNA President Dan Mica said CUNA supports the lower thresholds the bill would impose for additional restrictions and disclosure requirements on loans at certain interest rates, points and fees. For example, S.2438 would set the HOEPA thresholds for additional restrictions and disclosures at interest rates six percentage points above comparable Treasury securities for first-lien mortgages, and eight percentage points above Treasury securities for subordinate lien mortgages. Currently, the threshold for first lien mortgages is 8% above comparable Treasury securities..

The bill also prohibits creditors from financing points, fees or other changes greater than 3% of the total loan or $600; requires lenders to determine the borrower's ability to repay before making the loan; and requires lenders to provide borrowers with information onthe risks of high-cost loans and the availability of counseling.

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