Civil rights activists have come out against the euphemistically titled "Responsible Lending Act ." The Rev. Jesse L. Jackson, NAACP chairman Julian Bond, and Wade Henderson, executive director of the Leadership Conference in Civil Rights, have added their names and voices to help consumer advocates defeat a bill that would preempt state or local laws that afford additional substantive protections. The bill would also wipe out a recent regulatory ruling mandating that state-chartered thrifts and independent mortgage companies cannot evade state limits on late fees and prepayment penalties on adjustable-rate mortgages and other alternative loans.
"Representatives Ney and Kanjorski have failed to provide meaningful protections in their mis-named 'Responsible Lending Act,' " said NAACP chairman Julian Bond. "Their bill demonstrates a failure to address the real pain caused by predatory lending and the harm it is doing to African-American families."
The Washington Post reports:
"The civil rights groups contend that the Ney-Kanjorski approach falls far short of what is needed to stop abusive lending targeted at minorities, the elderly and immigrants and instead removes protections in existing federal law and in state and local regulations. The states and local jurisdictions have been passing laws since about 1999 as lending to subprime, or higher-risk, borrowers has exploded. Although not all subprime lending is predatory, complaints about abusive lending, with hidden or excessive fees and deceptive practices, have skyrocketed as higher-cost, subprime loans have become available."