Congresswoman Tubbs Jones Reintroduces Predatory Lending Legislation
April 29, 2005
WASHINGTON, -- Congresswoman Stephanie Tubbs Jones reintroduced the Predatory Lending Practice Reduction Act of 2005. This legislation calls for federal certification of mortgage brokers and agents and stiffer penalties for violation of federal law. Additionally, it will authorize funding for Community Development Corporations to provide training and education.
According to the Department of Housing and Urban Development, from 1993 to 1998 the number of subprime refinancing loans increased ten-fold. Additionally, subprime loans are three times more likely in low-income neighborhoods than in high-income neighborhoods and five times more likely in minority neighborhoods than in white neighborhoods.
"One of the first steps toward creating wealth is homeownership," stated Rep. Tubbs Jones. "The equity from owning a home is often the only means to secure funding for a new business, college tuition, or retirement. Predatory lending targets low-income and minority communities. It compromises the opportunity to own a home and hinders economic stability, creating greater disparities in wealth."
"It is for these reasons that I have introduced this important legislation which seeks to protect consumers by implementing guidelines to ensure that lending practices are done fairly."
Specifically, the legislation:
- Authorizes $2 million for a certification program to require mortgage brokers and other related service agents involved in the subprime loan market to be trained and tested on the rules and regulations pertaining to mortgage lending including, but not limited to The Truth in Lending Act and the Fair Housing Act
- Authorizes $2 million for community development corporations to provide training and educational information designed to enhance awareness of predatory practices
- Creates minimum disclosure standards protecting consumers' rights related to home foreclosures
- Calls on Creditors to create best practices plans and good faith resolution standards to slow the escalating number of complaints
- Establishes an escalating civil penalty payment scale for violators of federal regulation
Source: Office of Congresswoman Stephanie Tubbs Jones