Committee rejects predatory lending bill

Wednesday, February 20th 2002, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) _ Legislation that would place limits on predatory lending practices was declared dead by its author Tuesday after it was rejected by the House Banking and Finance Committee.

``I'm terribly disappointed and saddened,'' said Rep. Opio Toure, D-Oklahoma City, who said his bill would help put a stop to lenders who charge double-digit interest rates and exorbitant fees to low-income and elderly homeowners.

``The citizens of our state are being victimized. Folks are going to lose their homes,'' Toure said.

``The law currently doesn't protect consumers,'' said Steven Dow, executive director of the Community Action Project of Tulsa. ``They're allowed to do these rampant predatory practices and they're all legal.''

The measure, supported by the American Association of Retired Persons and other lending reform advocates, was questioned by mortgage brokers and bankers who said it did not address finance companies who are primarily responsible for predatory lending practices.

``This bill will not come close,'' said Akos Kovach, president of the Oklahoma Association of Mortgage Brokers.

The bill would have placed new restrictions on companies that seek out Oklahomans with less-than-prefect credit and sell so-called sub-prime loans to refinance their home mortgages and charge interest rates of up to 14 percent.

``The protections we have in place are not sufficient to stop the problem,'' Toure said.

But Kovach said the measure would affect legitimate banks and lenders who in some cases are required to issue sub-prime loans to comply with federal urban revitalization rules.

``Just attacking sub-prime lending ... is not helping sub-prime consumers,'' Kovach said.

Bankers said the legislation could cause lending to dry up for consumers with poor credit. Loan buying in North Carolina, the only other state to pass predatory lending legislation, has dropped 75 percent since the measure went into effect.

Toure said that legitimate banks and other financial institutions in the state have not been accused of predatory lending practices. But he declined to identify any company that has been accused.

``My desire was not to come in and throw rocks at an individual company,'' Toure said. ``I don't think that's fair.''

``Let me just say, it ain't us,'' said Roger M. Beverage, president and chief executive officer of the Oklahoma Bankers Association.

``There is apparently something going on that good people aren't doing,'' Beverage said.

Beverage said predatory lenders make loans strictly on the collateral involved and without regard to a homeowner's ability to repay it.

He said more consumer education is needed to avoid financial problems and foreclosures.

``It's letting people know about the system and how it works,'' he said.