Members of the House and Senate Banking Committees have proposed joint legislation that seeks to restrict abusive lending practices. The bill sponsored by U.S. Rep. John LaFalce (D., N.Y.) and Senator Paul Sarbanes (D., Md.) is in direct response to an increase in predatory lending tactics.
The "Predatory Lending Consumer Protection Act" aims to close loopholes found in two existing acts, the "Truth in Lending Act" (TILA) and the "Home Owners Equity Protection Act" (HOEPA). The legislation will extend HOEPA protections to high-cost mortgage refinancings, home-equity loans and home-repair loans; expand consumer protections by addressing additional lending abuses; and strengthen enforcement of HOEPA protections by enhancing civil remedies, recission rights and statutory penalties.