Senior Democrats propose new predatory lending legislation
Following on the heels of a media blitzkrieg on the credit industry, including payday lending, credit card companies, and the subprime mortgage industry, Democratic legislators in both houses of Congress are moving forward with legislation to curtail predatory lending practices. From the NY Times article:
The provisions include requiring mortgage lenders to determine if borrowers have the financial ability to repay loans and making issuers and buyers of predatory mortgages more legally accountable.
If this can make past an extremely well-funded lending industry not keen on further regulation, it could be a great help to consumers. The statute is both remedial and preventative. On the one hand, it would give consumers the right to sue mortgage lenders who write, well, stupid loans when they should know better. On the other, I’m sure the industry will say this means consumers will take advantage of them. Of course, lenders knew very well what they were doing when they started lending to risky borrowers and they made a heckuva lot of money doing it.
Did you even read the article? Where does it even mention payday lending or credit cards?
It doesn’t. I was referring to the intense media and legislative interest in all forms of lending in the last month or so. This legislation is pretty obviously related to that.
I am enjoying our discussion on The Consumerist. I wasn’t sure if you saw my latest post since the thread we were discussing has moved off the front page. I look forward to your follow-up.
I kind of gave up on that discussion. There is too little space to adequately address the scope of your response–or the issue generally. I hope to have a longer article up here on payday lending–and subprime lending generally–next week.
I look forward to it.