- The Washington Times - Monday, July 10, 2000

Regulators on the local level are trying to restrict abusive lending practices, much like their federal counterparts.
Local authorities provide the first line of defense against unscrupulous lenders because consumers come to them first, said S. Kathryn Allen, commissioner of the D.C. Office of Banking and Financial Institutions.
She said it seems as though the District has a particularly high rate of so-called "predatory" lending victims "because there is such a large population of minorities, and older minorities who own their own homes and have equity."
Officials in her office have written mortgage foreclosure legislation, including predatory lending measures, that have been sent to the mayor's office for review.
The bill would require an audit of every foreclosure in the city to determine if abusive lending played a role.
Her office has also conducted predatory lending educational forums in each of the city's wards.
"It goes beyond discrimination," Ms. Allen said of the problem. "It's disenfranchisement."
In Virginia, Edward Joseph Face Jr., commissioner of financial institutions, receives several thousand complaints a year about a variety of financial institutions.
He said the state does not have specific predatory lending statutes, but the legislature did pass the Mortgage Lender and Broker Act in 1987.
"That act has enabled us to enforce our mortgage loss and regulations quite effectively," he said.
New entrants into the lending business must go through an application process.
Mr. Face said federal regulation can be useful when it comes to clamping down on abusive lending practices as long as it doesn't pre-empt state regulation.
"I think we are in a better position to handle this and enforce our state laws," he said.
Mary Louise Preis, commissioner of financial regulation for Maryland, said all lenders, regardless of where they are based and whether they are a subsidiary of another company should be licensed and bonded in each state where they operate.
She said the state does have consumer protection laws, and her office received more funding this year to investigate unscrupulous lenders.
"I think most people think abusive lending, predatory lending of all types is already, in a way, against the law. It's a matter of enforcing and finding lenders who are disregarding borrowers' ability to pay" and committing other abuses, she said.
She also said education plays an important role in helping borrowers protect themselves.
"There's one thing pretty sure: There wouldn't be predatory lending if there weren't prey," she said.
To cut down on the number of potential prey, her agency puts out educational brochures and conducts other outreach projects.

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