WASHINGTON - Abusive credit practices cost U.S. borrowers $9.1 billion each year, according to a report issued Wednesday by the Coalition for Responsible Lending.

"The most important lending issue today is no longer denial of credit, but the terms of credit," coalition spokesman Martin Eakes said in a press statement. "The estimates in this report provide an order of magnitude of the amount of equity stripped each year from those least able to afford it."

Mr. Eakes is scheduled to testify at the Senate Banking Committee hearings that start today.

The Durham, N.C., consumer advocacy group said the estimates are based on its evaluation of two practices: equity stripping, which costs borrowers $6.2 billion each year, and risk-rate disparities, which cost $2.9 billion.

Equity stripping occurs when borrowers are charged excessive origination, broker, or other up-front fees; high financed fees such as single-premium credit insurance; and heavy back-end fees such as prepayment penalties, the group said.

Risk-rate disparities occur when lenders charge a higher interest rate than that justified by the risk they would incur in the loan, the group said. This is frequently done by subprime units of conventional lenders, according to the report.

"The ultimate and tragic consequence of these predatory practices is foreclosure," Mr. Eakes said. "Subprime loans with predatory terms are far more likely to end in foreclosure than conventional loans. Boarded-up homes in low-income neighborhoods carry a social cost far beyond the cost of the foreclosures themselves."

In his testimony today, Mr. Eakes plans to urge Congress to follow the lead of the North Carolina General Assembly, which in 1999 passed a tough anti-predatory lending law that placed restrictions on higher-cost loans. The consumer group was a force behind that legislation, he said.

Though applauded by consumer groups and politicians, the law has been severely criticized by lenders. In January, Countrywide Credit Industries Inc. of Calabasas, Calif., said the law's strict limits forced it to end its subprime lending operations in the state.

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