I 
110TH CONGRESS 
1ST SESSION H. R. 3133 
To authorize the Secretary of the Treasury to make grants to States, units 
of general local government, and nonprofit organizations for counseling 
and education programs for the prevention of predatory lending and 
to establish a toll-free telephone number for complaints regarding preda-
tory lending, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 23, 2007 
Mr. SCOTT of Georgia (for himself and Mr. SHAYS) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
To authorize the Secretary of the Treasury to make grants 
to States, units of general local government, and non-
profit organizations for counseling and education pro-
grams for the prevention of predatory lending and to 
establish a toll-free telephone number for complaints re-
garding predatory lending, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Financial Literacy for 
Homeowners Act’’. 
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SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) While expanded access to credit from both 
prime and subprime lenders has contributed to the 
highest homeownership rates in the Nation’s history, 
there is growing evidence that some lenders are en-
gaging in predatory lending practices—excessive 
front-end fees, single-premium credit life insurance, 
and exorbitant prepayment penalties—that make 
homeownership much more costly for families that 
can least afford it. 
(2) Borrowers with fair to good credit ratings 
may be able to obtain loans in the ‘‘prime’’ mortgage 
market, with the lowest interest rates and costs. 
(3) Borrowers with blemished credit histories 
obtain mortgage loans in the ‘‘subprime’’ mortgage 
market, with higher interest rates and loan fees than 
are obtainable in the prime market. Some subprime 
lenders have been making loans on terms that are 
regarded as ‘‘predatory’’. 
(4) Predatory lending involves home mortgages, 
mortgage refinancing, home equity loans, and home 
repair loans with unjustifiably high interest rates, 
excessive fees, balloon payments, prepayment pen-
alties, and the imposition of other unreasonable, and 
sometimes fraudulent, terms. 
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(5) Predatory loans are said to have grown rap-
idly in minority neighborhoods, often stripping away 
wealth that may have taken owners decades or a 
lifetime to accumulate. 
(6) Some communities that have lacked access 
to traditional institutions were being victimized by 
second mortgage lenders, home improvement con-
tractors, and finance companies who peddled high 
interest rate home equity loans with high loan fees 
to cash-poor homeowners. Borrowers, who may not 
have fully understood the terms of the loans, and 
who may not have been offered adequate disclosures 
of the loan terms, often have struggled to meet over-
whelming mortgage payments and too often ulti-
mately lost their homes through foreclosure. 
(7) A joint report by the Department of Hous-
ing and Urban Development and the Department of 
the Treasury, issued June 21, 2000, entitled ‘‘Curb-
ing Predatory Home Mortgage Lending’’, urged the 
Congress to adopt legislation that would restrict 
abusive terms and conditions on high-cost loans, 
prohibit harmful sales practices in mortgage mar-
kets, improve consumer literacy and disclosures, pro-
hibit government-sponsored enterprises from pur-
chasing loans with predatory features, and establish 
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