| WASHINGTON,
D.C. -- Congressional Caucus on Women's Issues Co-Chair Rep. Carolyn Maloney
(D-NY) and Rep. Jan Schakowsky (D-IL) released a letter signed by 28 Democratic
women urging Fed Chairman Alan Greenspan to use the Fed's existing authority
to target predatory lenders.
"The
Federal Reserve should use all the tools at its disposal to prevent unscrupulous
lenders from fleecing consumers. Requiring additional disclosures
for high cost loans is a critical step in increasing consumer protection,"
said Maloney. "Immediate action must be taken to prevent predatory
lenders from targeting traditionally underserved communities, unsophisticated
borrowers, the elderly, and particularly elderly women."
"Chairman
Greenspan earlier this year added his voice to the growing number of critics
of predatory lending. I appreciate his words, but now we need action.
The Fed should use all its regulatory powers to help consumers and protect
low-income families, seniors, and people of color from robbers who are
stealing their homes. In this instance, the Chairman's pen is mightier
than his voice," said Schakowsky, author of H.R. 3901, the Anti Predatory
Lending Act of 2000.
Under
the Home Owner Equity Protection Act (HOEPA), the Federal reserve has the
authority to lower APR, points and fee triggers to require additional consumer
disclosures for high cost loans with percentage rates of 8 percent above
Treasury bill rates, rather than the current 10 percent level. Furthermore,
the letter requests that the Board should implement the HUD/Treasury predatory
lending recommendations. These include banning loan flipping, mandatory
arbitration on high-cost loans, and lending to borrowers without regard
to their ability to repay and restricting balloon payments on high-cost
loans, prepayment penalties, points and fees. |
