Predatory lending fight

Consumer advocates for fair lending are opposing the California Assn. of Mortgage Brokers’ new definition of predatory home mortgage lending. They are urging the trade group to work on a redefinition or, better yet, support efforts to strengthen existing state and local legislation to end abusive lending practices and high interest rates targeted at the elderly and people of low income.

The California Reinvestment Coalition, which includes more than 200 nonprofit organizations, said there are vague and indefinable standards in the one-sentence definition: “Predatory lending is defined as intentionally placing consumers in loan products with significantly worse terms and/or higher costs than loans offered to similarly qualified consumers in the region for the primary purpose of enriching the originator and with little or no regard for the costs to the consumer.”

The advocates said the subjective standards of intent and the primary purpose of the originator do not necessarily preclude predatory lending or fair housing violations. While acknowledging the lenders’ effort as “positive,” Kevin Stein, the coalition’s associate director, said, “We think their definition is so narrow that many predatory loans will fall outside of it.”