American Banker reported in its Jan. 26 issue ["Industry Hits Back on Lending Abuse Laws," page 1] that mortgage bankers and national lenders met quietly in Dallas to hit back on lending-abuse laws. The purpose of the meeting, the article said, was to develop a unified battle plan.
The industry's claim that efforts supported by advocates, activists, and consumer organizations to stop predatory lenders would actually harm consumers is preposterous.
I agree that subprime lenders play a role in the marketplace, and that in order for some consumers to gain access to capital they must be prepared to pay more. Subprime is not synonymous with predatory.
But no one should be suckered into losing his or her home. The industry should stop blurring the lines and lay down their weapons.
It is hypocritical of industry leaders to launch a public relations campaign against predatory lenders and then rally their troops against any and all legitimate local, state, and federal initiatives that will give consumers real protections.
Without a serious plan that will drive predatory lenders out of business, they will continue to thrive and rake in the profits for themselves and the large financial institutions that own them.
I plan to reintroduce my anti-predatory-lending bill this Congress that will do just that: kick these robbers out of our neighborhoods. It contains provisions already adopted by the Federal Reserve.
My bill attacks the high interest rates and fees, single-premium insurance products, loan flipping and churning, unilateral call provisions, and loans made without regard to the borrower's ability to pay.
It sounds like the industry's interests were well represented in that meeting.
What about the interests of the homeowners whose houses were stolen by predatory lenders or the consumers who pay credit-card-high interest rates for home improvement loans? Were their interests represented?
Rep. Schakowsky is a Democrat from Illinois.