The Arkansas Home Loan Protection Act, the state’s predatory lending law, went into effect on July 16.The law, which regulates only second-lien home equity loans, follows guidelines set forth under the Home Ownership and Equity Protection Act for defining a high-cost loan. It prohibits refinancing without "reasonable tangible net benefit," limits prepayment penalties, and establishes a form of assignee liability that Standard & Poor's has said will pose no problems. A representative from the community activist group ACORN maintained that the lack of regulation on first-lien home loans leaves room for further legislation, though the state legislature is out of session until 2005.
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