As financial leaders in cities and towns across America, bankers are in an ideal position to help end abusive lending through education and awareness. Predatory lending is a problem, and our industry wants to be part of the solution.

As the Senate Banking Committee explores ways to eliminate predatory lending, bankers have both an opportunity and an obligation to contribute to the ongoing effort to end illegal lending wherever it takes place. The opportunity comes in the form of helping consumers avoid these loans. And the obligation we have is to make sure that every aspect of the lending process is fully disclosed and made clear to every customer.

Predatory lenders, of course, prey on those who are the least informed. They sell hopes and deliver nightmares to the elderly, the less educated, and the financially unsophisticated, and make their victims feel somehow grateful that they can obtain any credit at all. Unfortunately, that credit comes at an unacceptably high price.

In the belief that there cannot be too much information out there to arm consumers, the ABA recently developed a video and companion brochure. The 20-minute video, "Predatory Lending ... Don't Be Scammed," is available to our members, and we're about to release a Spanish-language version of the brochure, "Before You Borrow … How to Protect Yourself from Abusive Lenders." Other information for bankers is posted at

Bankers can be proud of their record on this issue. Our industry does not condone practices that deceive, defraud, or otherwise take advantage of consumers. We support and obey laws and criminal statutes that bar such practices.

Virtually every lending practice considered abusive or predatory today is already illegal, thanks to the existence of a substantial federal and state legal and regulatory structure. It goes without saying that these laws and regulations must be enforced and applied to every lender - across the board - and not just to traditional banks, thrifts, and others operating under close regulatory supervision.

At the same time, we must not create barriers for those lenders doing what they can - within the law - to extend credit to subprime borrowers, inner-city residents, and others who may not qualify under traditional loan terms. It would be a huge mistake to shut off credit to these borrowers in the process of shutting down the predatory lenders.

Enforcement is the first step, but education and other forms of awareness-building are just as important. Too many consumers, particularly those who are prime targets of predatory lenders, lack a basic understanding of the lending process. We can do a better job of giving them this understanding.

That is the mission of the ABA's Lending Practices Working Group, formed in early 2001. The group of bankers and state association executives advises the ABA on consumer outreach initiatives and community partnerships and oversees the association's activities in monitoring state and local legislation.

The best way to eliminate predatory lending is to enforce the laws, promote fair lending, and give every consumer the ability, and the knowledge, to make informed choices about credit. Ultimately, it will be this combination of efforts that will put the predators out of business.

Mr. Ballentine is director of the Center for Community Development at the American Bankers Association.

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