[Congressional Record Volume 149, Number 63 (Wednesday, April 30, 2003)]
[Extensions of Remarks]
[Page E815]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         PREVENTION OF PREDATORY LENDING THROUGH EDUCATION ACT

                                 ______
                                 

                            HON. DAVID SCOTT

                               of georgia

                    in the house of representatives

                        Tuesday, April 29, 2003

  Mr. SCOTT of Georgia. Mr. Speaker, thank you for the opportunity to 
discuss legislation that I am introducing today that will coordinate 
government agencies and non profit organizations that provide education 
counseling to consumers who have been victims of predatory lending 
practices. This legislation is intended to improve consumer literacy, 
reduce harmful mortgage lending practices, and provide borrowers with a 
nationwide toll-free telephone number to receive complaints regarding 
predatory lenders and create a resource database of information.
  While expanded access to credit from both prime and subprime lenders 
has contributed to the highest homeownership rates in the nation's 
history, there is growing evidence that some lenders are engaging in 
predatory lending practices--excessive front-end fees, single premium 
credit life insurance, and exorbitant prepayment penalties--that make 
homeownership much more costly for families that can least afford it. 
Predatory loans are said to have grown rapidly in minority 
neighborhoods, often stripping away wealth that may have taken 
homeowners decades or a lifetime to accumulate. Some communities which 
lacked access to traditional institutions were being victimized by 
second mortgage lenders, home improvement contractors, and finance 
companies who peddled high interest rate home equity loans with high 
loan fees to cash-poor homeowners.
  A joint report by the Department of Housing and Urban Development and 
the Treasury Department, issued June 21, 2000, Curbing Predatory Home 
Mortgage Lending, urged Congress to adopt legislation that would 
restrict abusive terms and conditions on high-cost loans, prohibit 
harmful sales practices in mortgage markets, improve consumer literacy 
and disclosures, and prohibit government-sponsored enterprises from 
purchasing loans with predatory features and establishing predatory 
lending as a factor in CRA evaluations.
  Therefore, I urge my colleagues to support this legislation that will 
assist borrowers who already have predatory loans, educate consumers 
about the dangers and pitfalls of entering into a home loan, and refer 
consumers to appropriate governmental agencies or consumer protection 
organizations for assistance.
  I ask unanimous consent that the text of the legislation and my 
statement are printed into the Record.

                          ____________________