ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release July 26, 2001 #01-49
E-mail: [email protected]

ACB CAUTIONS CONGRESS AGAINST OVERREACHING IN PREDATORY LENDING FIX

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WASHINGTON, D.C. — America’s Community Bankers has told the Senate Committee on Banking, Housing and Urban Affairs that policymakers should avoid over-inclusive regulations against predatory lending because that could limit the availability of credit to worthwhile borrowers.

ACB warned the committee that “legislative and regulatory attempts to deal with predatory lending face serious challenges. New laws and regulations could discourage certain types of lending by inaccurately labeling loans as ‘predatory’ or stigmatizing legitimate loan terms,” ACB said in a statement submitted to the committee today. The committee is in the first day of a two-day hearing on predatory lending.

Warning that “predatory lending practices undermine homeownership and damage communities,” ACB pledged to work with the committee and other policy makers “to eliminate predatory lending practices in the most effective way . . .and to improve access to sound loans for credit worthy borrowers.”

“While regulation and improved supervision have important roles to play, the consumer is the first line of defense against abusive practices,” ACB told the committee.

ACB noted that “many firms associated with predatory practices are not subject to regular examination and rigorous supervision.” ACB urged federal financial supervisory agencies to work with the Federal Trade Commission and the states to see that new and existing rules apply to all mortgage lenders.

“Unless all lenders are subject to the same rigorous enforcement, new rules only will increase the burden on institutions that are now heavily supervised while failing to solve the predatory lending problem,” ACB told the committee.

ACB pledged that its members will increase consumers’ access to high-quality homeownership education and counseling because that is “an effective way to prevent predatory lending.”

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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