Prohibit Predatory Lending Act

Bill: 109-hr-1182
Sponsor: Rep. Miller, Brad [D-NC-13]
Introduced: 2005-03-09 in the House
Policy area: Finance and Financial Sector
Subjects: Administrative procedure
Civil actions and liability
Collection of accounts
Commerce
Commercial arbitration
Consumer credit
Consumer education
Consumer protection
Counseling
Credit insurance
Debt
Debtor and creditor
Evidence (Law)
Federal Reserve System
Fees
Fines (Penalties)
Foreclosure
Government Operations and Politics
Housing and Community Development
Insurance premiums
Law
Limitation of actions
Loan defaults
Mortgage banks
Mortgage interest rates
Mortgages
Restrictive trade practices
Settlement costs
Social Welfare
Usury

Summary:
action_date: 2005-03-09
text: 
Prohibit Predatory Lending Act - Amends the Truth in Lending Act in connection with consumer credit cost disclosure to redefine: (1) high-cost mortgage; (2) the formula used to adjust certain percentage points in connection with a consumer credit transaction secured by the consumer's principal dwelling; and (3) related points and fees.
 
Sets forth a formula to calculate: (1) points and fees for open-end loans; and (2) bona fide discount points and prepayment penalties.
 
Revises requirements for: (1) prepayment penalties; (2) balloon payments; and (3) extension of credit without regard to consumer's payment ability.
 
Prohibits in connection with high-cost mortgages: (1) a lender from recommending a default on an existing debt prior to and in connection with the closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt; (2) specified late fees; (3) certain accelerations of debt; (4) certain evasions, structuring of transactions, and reciprocal arrangements; (5) certain modification and deferral fees; and (6) mandatory arbitration or other nonjudicial procedures.
 
Mandates pre-loan counseling as a prerequisite for a high-loan mortgage.
 
Revises guidelines governing lender liability for correction of errors. 
 
Prohibits a lender from knowingly or intentionally engaging in the unfair act or practice of flipping (the making of a loan or extension of credit to a consumer which refinances an existing mortgage when the new loan or credit extension does not have reasonable, tangible net benefit to the consumer, considering all of the circumstances, including the terms of both the new and the refinanced loans or credit, the cost of the new loan or credit, and the consumer's circumstances).
 
Prohibits single premium credit insurance.
 
Doubles civil money penalties for certain violations.
 
Extends to three years the statute of limitations for violation of certain statutory disclosure requirements.


Legislative actions:
action_date: 2005-05-13
text: Referred to the Subcommittee on Housing and Community Opportunity.
action_date: 2005-05-13
text: Referred to the Subcommittee on Financial Institutions and Consumer Credit.
action_date: 2005-04-19
text: Sponsor introductory remarks on measure. (CR H2110-2111)
action_date: 2005-03-09
text: Referred to the House Committee on Financial Services.
action_date: 2005-03-09
text: Introduced in House
action_date: 2005-03-09
text: Introduced in House