Ney and Kanjorski Outline Plans for Subprime Lending Bill
October 8, 2004
Comprehensive Plan Will Protect Consumers with Strong Standards and Other Reforms
WASHINGTON -- Congressman Bob Ney (R-OH), Chairman of the Subcommittee on Housing and Community Development, and Congressman Paul E. Kanjorski (D-PA), the most senior Democrat on the House Financial Services Capital Markets Subcommittee, today announced that they will work together to craft bipartisan legislation that will protect consumers by establishing strong uniform national standards for subprime lenders and adopting other needed reforms to help homebuyers and homeowners. Their comprehensive bill will respond to growing complaints about so-called "predatory" lending practices and conflicting state laws, as well as the need to further enhance consumer education and protections.
"There is a genuine need for strong uniform national lending standards with appropriate enforcement mechanisms, and it is important to build on the growing bipartisan consensus about the need to address these important issues," said Congressman Kanjorski. "I am therefore very pleased that Congressman Ney is willing to work with me to refine and enhance his original legislation by incorporating key ideas found in other legislative proposals pending in the Congress, valuable concepts from current state laws, and other important reforms."
"I am delighted that Representative Kanjorski has agreed to work with me on this important issue and at the progress we have made in examining these matters," commented Congressman Ney. "I said from the outset that I was flexible and willing to refine H.R. 833. That's exactly what Representative Kanjorski and I will be doing."
Congressman Ney introduced H.R. 833, the Responsible Lending Act, along with Congressman Ken Lucas (D-KY), who is retiring, at the start of the 108th Congress. Their bill was the first legislation introduced in the current legislative session to address issues in the nonprime marketplace, which helps people with less-than-perfect credit to purchase homes, establish better credit records, and join the economic mainstream. Since that time, others interested in the issue of subprime lending have put forward their own proposals to address these issues, including Senator Paul Sarbanes (D-MD), the Ranking Member of the Senate Banking Committee, and Congressmen Brad Miller (D-NC) and Mel Watt (D-NC), two active Members of the House Financial Services Committee.
Congressman Ney added, "The hearings that Representative Bachus and I have held clearly demonstrated both the importance of ensuring the continued availability of nonprime mortgage credit and the need for a strong new federal nonprime mortgage lending law to provide clear and uniform national rules that protect all borrowers. Many states do not have effective laws. The laws that exist are all different, are often conflicting and unclear, and are sometimes too extreme, which ultimately prevents consumers from obtaining the credit they need."
"This problem is complex and requires a comprehensive legislative solution," agreed Congressman Kanjorski. "Not only should we implement strong national standards to protect consumers in the subprime marketplace, but we should also work to address housing counseling, mortgage servicing, broker licensing, and appraisal issues in any legislation that the Congress adopts. The enactment of a comprehensive law will ensure that all homebuyers and homeowners are appropriately protected in today's complex mortgage marketplace."
House Financial Services Committee Chairman Michael G. Oxley (R-OH), said, "We need to reduce disparities in lending protections for people with credit problems. As in the case of the Committee's successful work on credit reporting legislation, any such effort must be bipartisan, so I commend Reps. Ney and Kanjorski for their efforts to work together on these issues."
Congressmen Ney and Kanjorski expect to circulate their comprehensive subprime lending legislation when the Congress returns to Washington after the election. At previous congressional hearings of the Housing Subcommittee and the Financial Institutions Subcommittee, many Members of Congress have expressed an interest in considering such a bill. These two senior Members of the Financial Services Committee therefore hope that their proposal will garner broad, bipartisan support and will serve as the primary House legislative vehicle for addressing these lending and consumer protection issues when the 109th Congress convenes in January 2005.