O'Malley lobbies for bill to aid banks

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ANNAPOLIS — Gov. Martin O'Malley has made himself the consumer's champion in the home-foreclosure crisis by publicly questioning mortgage lenders about their practices, but has less publicly been lobbying for a bill to allow Maryland-chartered banks to charge borrowers pre-payment "penalties."

The bill emerged in the General Assembly while a class-action suit is pending against Provident Bank after the bank charged customer Andrew Bednar a $681 penalty for refinancing a $17,000 loan.

Yesterday, Mr. O'Malleysummoned the mortgage lenders to the State House to discuss ways to stop the growing number of foreclosures in Maryland and vowed to crack down on those who would not cooperate.

But critics of the proposal say it is disingenuous for Mr. O'Malley to also support a measure that would hit homeowners with penalty fees for paying off a loan early.

The proposal also has revived a political battle between Mr. O'Malley, a Democrat, and attorney Peter Angelos, whose firm in 2005 filed Mr. Bednar's original lawsuit and is actively lobbying against the proposal.

Mr. Angelos was a frequent critic of Mr. O'Malley when he was mayor of Baltimore and supported Gov. Robert L. Ehrlich Jr., a Republican, in his re-election bid against Mr. O'Malley.

The class-action suit proceeded because the Maryland Court of Appeals overturned a lower court's decision in favor of the bank.

M. Albert Figinski, an Angelos representative, told members of the Senate Finance Committee last week that state banks are trying to accomplish by legislation what they could not in court.

Mr. O'Malley has attempted to build a public image as a crusader for consumer rights, though he failed last year to stop a 72 percent rate increase for Baltimore Gas and Electric customers.

He also has attempted to take a national lead on environmental legislation, which is being perceived as groundwork for seeking a national office.