Tennessee must enact tougher laws against predatory lending
The issue is much simpler than some people would have you believe. Lending practices that almost never help consumers should be outlawed in Tennessee.
The Tennessee General Assembly has no legitimate excuse for repeatedly burying legislation that would have buried predatory lending practices.
The legislature reconvened for its 2004 session this week with a number of thorny issues on its agenda, but cracking down on lending practices should not again be shoved aside.
The first draft of a bill drafted by Gov. Phil Bredesen’s administration showed some promise, but a more recent version contains a number of weaknesses.
Tennessee should move forward with the strongest possible protections against the sort of lending practices that never really solve a consumer’s problem, but only add to his or her woes.
The governor’s proposed Tennessee Home Loan Protection Act would require individual brokers to register with the state. It would hold licensed mortgage broker companies responsible for fines up to $10,000 when a broker steps out of line.
The bill also would prohibit a lender from replacing a low-interest subsidized loan for the poor with a high-cost mortgage.
As other states continue to take action to stop predatory lending practices, unscrupulous lenders will have fewer places to practice their craft.
Tennessee should not be a safe haven for those who prey on the poor, the elderly and the financially illiterate.