Rep. Ney Seeks Override of State Predatory Lending Laws

Rep. Bob Ney, R-Ohio, the new chairman of the House Financial Services subcommittee on housing, plans to make a big push to pass a predatory lending bill that provides consumer protections and pre-empts state predatory lending laws.

"Are we going to give it a 150% effort? We sure are," Rep. Ney told a National Association of Affordable Housing Lenders conference.

The Ohio congressman noted that a pre-emption is necessary to override state and local predatory lending laws that are restricting the availability of credit.

"You just can't pass so many rules and regulations as Georgia did," he said, where "it backfires and people can't get housing."

His predatory lending bill is still being drafted and he trying to round up Republican and Democratic lawmakers to co-sponsor the bill before it is introduced.

Rep. Ney enjoys strong support within the lending industry for his efforts, but he is going to face a serious challenge from Democrats on the housing subcommittee.

In addressing the NAAHL conference, Rep. Barney Frank, D-Mass., said the Democrats will be working on an alternative predatory lending bill that does not provide for a federal pre-emption and will restrict the use of mandatory arbitration.

He told reporters the individual states should set lending standards and he called the pre-emption orders issued by the Office of Thrift Supervision in Georgia and New York "outrageous."

"It is one of the great hypocrisies of conservatives that they talk about states rights until business feels the states are getting too assertive," Rep. Frank said.

The ranking Democrat on the House Financial Services Committee indicated, however, that he might be able to accept pre-emption if the consumer protections in the bill are tough enough.

Meanwhile, the new housing subcommittee chairman told the affordable housing group that he plans to hold hearings on housing secretary Mel Martinez's efforts to reform the Real Estate Settlement Procedures Act, the Section 8 rental assistance program and Federal Housing Administration reforms.

The General Accounting Office announced last week that it is continuing to list the FHA single-family program as a "high risk" government program due to its vulnerability to mortgage fraud, poor oversight of lenders and appraisers, and outdated information systems.

Rep. Ney raised questions about the FHA's ability to manage its multibillion-dollar single-family and multifamily loan portfolios, as well as the agency's ability to adopt new technology.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

Next in News ►