Flawed Predatory Lending Bill, with Preemption Provision, Nears House Floor

by Deepak Gupta

As law professor and guest-blogger Alan White explained in a post here last week, Barney Frank's new predatory lending bill -- H.R. 3915, known as the "Mortgage Reform and Anti-Predatory Lending Act of 2007" -- is not nearly as pro-consumer as its title suggests. In fact, the bill contains a terrible provision that would preempt state-law liability and, as currently drafted, would immunize most subprime mortgage assignees from any liability at all.

The latest word is that Rep. Frank is working on a new version of the bill and other members have until 10:00 am EST tomorrow (Wednesday) to submit amendments. The bill will go to the full House of Representatives on Thursday. The consumer groups following the bill remain concerned that it is weak and may actually do more harm than good for consumers. The mortgage industry is lobbying very heavily to weaken the good parts of the bill and make the preemption more devastating. Those who are concerned and want to express their views can call Congress at (202) 224-3121 or go to House.gov for the email or direct phone number of their representative.

An up-to-date analysis of the bill by Alys Cohen and Margot Saunders of the National Consumer Law Center is attached. Here's an excerpt: