Mark Winston Griffith

Giving Predatory Lenders License to Ill

Ney-Kanjorski sucks

There. I said it.

The latest episode in the predatory lending wars represents a moment in the public discourse when all subtlety needs to be abandoned. Accordingly, every effort should be made to defeat H.R. 1295, the bill known as Ney-Kanjorski, which, the sponsors of the bill contend, attempts to establish uniform, national, anti-predatory lending standards.

Not that this country couldn't use a tough standard in this regard. But Ney-Kanjorski ain't the one. The Center for Responsible Lending recently convened leaders from across the country to warn that this legislation would preempt stronger state-based anti-predatory policy already on the books in states like North Carolina, Illinois and New York.

In fact, New York State's existing anti-predatory lending measures have already been largely responsible for shutting down many of the nefarious practices in the mortgage re-finance market in New York. Ney-Kanjorski would override and wipe away many of these gains by opening loopholes for mortgage lenders and allowing practices long considered shady and abusive. If predatory lending rats are always looking for new holes to slip through, then Ney-Kanjorski hands them a road map.

On the surface, this bill is a compromise, intended to get fair lending advocates off the predatory lending scent, while creating consumer protection standards soft and squishy enough even a hardened banker can be nudged to accept. The mortgage banker trade group, the Mortgage Bankers Association, has already gotten with the program and endorsed Ney-Kanjorski.

But it is exactly this kind of supposedly well-intentioned gesture that needs to be outed for the Trojan horse that it is and beaten back at the gate.

The real winning ticket is the Miller-Watt-Frank bill, H.R. 1182, which is in synch with many strong state anti-predatory laws. Miller-Watt-Frank provides a much more effective innoculation against lenders trying to have their way with low- and moderate-income neighborhood borrowers.

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Posted at 8:00 AM, Dec 05, 2005 in Banking
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