Eakes Calls For Curbs On Predatory Lending
Martin Eakes, a leader of the community development credit union movement, called on Congress last week to pass legislation to establish national barriers to predatory lending.
Eakes, the head of Self-Help CU and its affiliate the Center for Responsible Lending, testified during hearings before a House Financial Services subcommittee on behalf of legislation modeled after a North Carolina law he helped pass that bans 'flipping,' or constant refinancing to generate new fees, and high prepayment penalties.
Eakes and other consumer advocates said they oppose an alternative bill being debated by the committee which would preempt the North Carolina law and those in several other states in an effort to establish national standards to fight predatory lending. "Federal preemption of state anti-predatory lending laws would be misguided, as any federal standards should supplement, not replace, existing state efforts," Eakes told the Financial Services subcommittee on financial institutions.
The issue of federal preemption of state laws, especially when it comes to predatory loan laws, has become a major one for credit unions, as well as banks, in recent years. When state laws have come in conflict with federal laws NCUA has ruled that federal statute preempts state laws for federally chartered credit unions.
Self-Help CU, which has grown into a $200 million credit union has branched out in recent years to encompass other areas of community development, working to a secondary mortgage market for non-conforming mortgage loans, creating the Center for Responsible Lending in Washington to lobby Congress and the federal regulators.
Neither of the two bills on predatory lending are expected to pass the Congress this year.
Ed Roberts can be reached at eroberts