Predatory Lending: Background on the Issue and Overview of Legislation in the 106th Congress

Predatory Lending: Background on the Issue and Overview of Legislation in the 106th Congress

Order Code RL30885
CRS Report for Congress
Received through the CRS Web
Predatory Lending: Background on the Issue and
Overview of Legislation in the 106th Congress
March 7, 2001
Bruce E. Foote
Analyst in Housing
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Predatory Lending: Background on the Issue and
Overview of Legislation in the 106th Congress
Summary
This report presents an overview of the predatory lending issue, a summary of
present law, a summary of joint HUD and Treasury recommendations to address the
issue, and a side-by-side summary of five bills introduced in the 106th Congress that
addressed the issue. Though no action occurred on these bills, the issue is expected
to continue in the 107th Congress.

The Home Ownership and Equity Protection Act of 1994 (Subtitle B of Title I
of P.L. 103-325) amended the Truth in Lending Act (TILA) to provide new consumer
protections for certain “high cost loans.” Basically, the law defines a high cost loan
as a loan secured by the principal residence of the borrower, but which is not used for
the purchase of the residence, and which meets one of the following conditions: (1)
the annual percentage rate on the loan exceeds the rate on comparable Treasury
securities by more than 10 percentage points, or (2) the total points and fees paid by
the borrower at or before loan closing exceed the greater of $465 or 8% of the total
loan amount.
Current law does not prohibit high interest rates and high fees, but the law
requires special disclosures when such rates and fees are present. All five bills would
approach the problem by amending TILA to redefine high cost loans such that the
special disclosures would be triggered at lower interest rates.
The proposed legislation would have amended current law to make existing
prohibitions stronger or create additional prohibitions. For example, under present
law, mortgages with 5-year terms or more may not be written such that a large
payment is due at the loan term (balloon mortgages). All the bills except H.R. 4213
would have prohibited all balloon mortgages. S. 2405 would have prohibited lenders
from charging points and fees on a high cost mortgage which is being used to
refinance a high cost mortgage from the same lender.
S. 2405 would have prohibited high cost mortgages unless the lender has
received certification that the prospective borrower has received counseling from an
approved agency, while H.R. 4250 and S. 2415 would have required the lender to
provide the borrower with a disclosure statement recommending such counseling, as
well as the contact information for certified counseling agencies.
H.R. 3901 would have amended the Home Mortgage Disclosure Act to require
lenders to report information on the interest rates charged on loans. This would
enable regulators to track and identify high interest rate loans and lenders with high
costs. H.R. 4213 would have amended the Real Estate Settlement Procedures Act to
add additional disclosure requirements. H.R. 4250 would have amended the Fair
Credit Reporting Act.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The HUD-Treasury Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Legislation Introduced in the 106th Congress . . . . . . . . . . . . . . . . . . . . . . . 3
Miscellaneous Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
List of Tables
Table 1. Side-by-Side Summary of the Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Predatory Lending: Background on the
Issue and Overview of Legislation in the
106th Congress
Introduction
The market for mortgage loans may be considered as a dual mortgage market.
Borrowers with fair to good credit ratings may be able to obtain loans on the “prime”
mortgage market. They are able to obtain the loans with the lowest interest rates and
costs. Borrowers with blemished credit histories obtain mortgage loans on the
“subprime” mortgage market, and obtain the loans with higher interest rates and loan
fees than are obtainable in the prime market. The problem is that some subprime
lenders have been making loans on terms that are regarded as “predatory.” While
existing laws have addressed some of the problems of predatory lending, many issues
remain.
This issue was the subject of legislation introduced in the 106th Congress, and is
one of the issues listed in the oversight plan for the House Committee on Financial
Services for the 107th Congress.
Current Law
In 1993, testimony before the Congress indicated that some communities which
lacked access to traditional lending institutions were being victimized by second
mortgage lenders, home improvement contractors, and finance companies who
peddled high interest rate home equity loans with high loan fees to cash-poor
homeowners. It was suggested that homeowners were offered home improvement
loans and credit consolidation loans. 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 had to struggle to meet overwhelming mortgage payments, and
too often they ultimately lost their homes through foreclosure.
Congress decided that legislation was needed to address the issue and protect
such homeowners. The issue was addressed in Subtitle B of Title I of the Riegle
Community Development and Regulatory Improvement Act of 1994 (P.L. 103-325);
the subtitle is cited as the Home Ownership and Equity Protection Act of 1994. This
subtitle amended the Truth in Lending Act (TILA) to provide new consumer
protections for certain “high cost loans.”
Basically, the law defines a high cost loan as a loan secured by the principal
residence of the borrower, but which is not used for the purchase of the residence,
and which meets one of the following conditions: (1) the annual percentage rate on
the loan exceeds the rate on comparable Treasury securities by more than 10

CRS-2
percentage points, or (2) the total points and fees paid by the borrower at or before
loan closing exceed the greater of $465 or 8% of the total loan amount.1
The law does not limit the interest rate and loan fees that lenders may charge.
Limits are placed on the provisions that may be included in high cost loans, and the
loans must meet certain disclosure requirements:
! At least 3 business days before completing the transaction, a borrower must be
given special disclosures. This gives the borrower a 3-day “cooling off period”
before becoming obligated under the loan. This is in addition to the 3-day
cooling-off period during which the borrower may cancel the loan after
completing the transaction. One disclosure must contain the following
statement, “You are not required to complete this transaction merely because
you have received these disclosures or have signed a loan application. If you
obtain this loan, the lender will have a mortgage on your home. You could
lose your home, and any money you have put into it, if you do not meet your
obligations under the loan”;
! For loans with terms of less than 5 years the payment schedule must be such
that the loan is completely repaid at the end of the loan term;
! The loan may not have a payment schedule which would cause the loan
balance to increase, and there may not be a penalty for paying off the loan prior
to its maturity date;
! A lender may not engage in the practice of extending mortgage loans without
regard to the borrower’s ability to make the scheduled payments; and
! A borrower has the right to rescind the loan if the lender fails to furnish the
required disclosures or if the loan documents include one or more of the
prohibited terms.
The HUD-Treasury Report
In addition to legislation proposed in the 106th Congress, recommendations to
curb predatory lending were detailed in a joint report released last year by the
Department of Housing and Urban Development (HUD) and the Department of the
Treasury.
The National Task Force on Predatory Lending, convened in March 2000, was
chaired by Andrew Cuomo, who was Secretary of HUD, and co-chaired by Lawrence
Summers, who was Secretary of the Treasury. Members of the Task Force included
a wide range of parties interested in and affected by the predatory lending issue.
Between April and May 2000, the Task Force held five forums around the country for
Task Force members, and each forum had a specific theme: Atlanta, GA – The Impact
of Predatory Lending on Minorities; Los Angeles, CA - The Elderly and Predatory
Lending; New York, NY - Funding Sources for Predatory Lending; Baltimore, MD -
1A figure of $400 was enacted but the Federal Reserve adjusts that number annually based
on the annual percentage change reflected in the Consumer Price Index that is in effect on June
1st of a given year, and the adjusted amount will become effective on January 1st of the next
year. For 2001, the adjusted dollar amount is $465.

CRS-3
The Role of Other Key, Non-lender Players; and Chicago, IL - State and Local
Initiatives to Curb Predatory Lending.
In June 2000, the Task Force released a report detailing recommendations for
legislative, regulatory, and other steps that would help curb predatory lending
practices. The report, “Curbing Predatory Home Mortgage Lending,” proposes a
four-point plan to address predatory lending practices:
! Improve Consumer Literacy and Disclosures. The report proposes that
lenders be required to recommend that applicants for high-cost loans avail
themselves of home mortgage counseling, that lenders disclose credit scores
to all borrowers upon request, and that lenders give borrowers more timely and
more accurate information on loan costs and terms;
! Prohibit Harmful Sales Practices in the Mortgage Market. The report
recommends the banning of practices such as loan “flipping” and lending to
borrowers without regard to their ability to repay the loan. It is also suggested
that new requirements be imposed on mortgage brokers to document the
appropriateness of a high-cost loan for certain applicants, and that lenders who
report to credit bureaus should be required to provide “full-file” payment
history for their mortgage customers;
! Restrict Abusive Terms and Conditions on High-Cost Loans. The report
recommends that Congress increase the number of borrowers in the subprime
market covered by legislative protections; further restrict balloon payments on
high-cost loans; restrict prepayment penalties and the financing of points and
fees; prohibit mandatory arbitration agreements on high-cost loans; and ban
lump-sum credit life insurance and similar products;
! Improve Market Structure. The report recommends the award of
Community Reinvestment Act (CRA) credit to lenders that promote borrowers
from the subprime to prime mortgage market, and the denial of CRA credit
to lenders for the origination or purchase of loans that violate applicable
lending laws. It is recommended that lenders disclose the incidence of high-
cost loans in pools of mortgage-backed securities and that the incidence of
such loans be disclosed in the offering documents for the securities. The report
recommends that Congress enact legislation which clarifies the authority of
HUD and the Federal Housing Finance Board to issue regulations which
prohibit the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the Federal Home Loan Banks from purchasing
loans with predatory features.
Several of the Task Force recommendations were included in legislation
introduced in the 106th Congress and described in this report.
Legislation Introduced in the 106th Congress
As noted above, current law does not prohibit high interest rates and high fees,
but the law requires special disclosures when such rates and fees are present. Some
argue that the rates and fees are so high under current law that lenders can charge
rates and fees which are less than those levels and the loans may still be regarded as
predatory. All five bills that were proposed in the 106th Congress would have
approached the problem by amending the Truth in Lending Act (TILA) to redefine

CRS-4
high cost loans such that the special disclosures would be triggered at lower interest
rates. Some consumer groups would welcome the proposed changes but might argue
that what is really needed is a return to usury legislation – restricting the rate of
interest that may be charged. It is likely that such an approach would be resisted by
lenders and their representatives.
As introduced in the 106th Congress, the proposed legislation would have
amended current law to make existing prohibitions stronger or create additional
prohibitions. For example, under present law, mortgages with 5-year terms or more
may not be written such that a large payment is due at the loan term (balloon
mortgages). All the bills except H.R. 4213 would have prohibited all balloon
mortgages. S. 2405 would have prohibited lenders from charging points and fees on
a high cost mortgage which is being used to refinance a high cost mortgage from the
same lender.
It has been argued by consumer groups that predatory lenders take advantage
of the financial ignorance of the target market. So, S. 2405 would have prohibited
high cost mortgages unless the lender has received certification that the prospective
borrower had received counseling from an approved agency, while H.R. 4250 and S.
2415 would have required the lender to provide the borrower with a disclosure
statement recommending such counseling, as well as the contact information for
certified counseling agencies.
Consumer groups also argue that borrowers have incomplete legal protection
from predatory lending. Enforcement authority would have been increased under S.
2405 by several means. In addition to existing penalties under current law, predatory
lenders would be subject to penalties contained in the Bank Holding Company Act of
1956. Thus, the company and individual officers could be subject to fines and
incarceration. The bill would have provided that certain violations would be deemed
as unfair and deceptive practices under the Federal Trade Commission Act. High cost
loans would not count towards meeting the lending needs of the community under the
Community Reinvestment Act. This would remove the incentive to make certain
loans.
H.R. 3901 would have amended the Home Mortgage Disclosure Act to require
lenders to report information on the interest rates charged on loans. This would
enable regulators to track and identify high interest rate loans and lenders with high
costs. H.R. 4213 would have amended the Real Estate Settlement Procedures Act to
add additional disclosure requirements. H.R. 4250 would have amended the Fair
Credit Reporting Act.
Other than hearings, no action was taken on any of the bills during the 106th
Congress. A side-by-side summary of the bills is presented in the following table.

CRS-5
Table 1. Side-by-Side Summary of the Bills
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
Home Mortgage Disclosure Act Amendments (HMDA)
Maintaining
No provision
Lenders would be
No provision
No provision
No provision
information on
required to maintain
interest rates
information on the
annual percentage rate
of mortgage loans and
home improvement
loans originated by the
institution and to
group the information
according to census
tract, income level,
racial characteristics,
and gender.
Reporting
No Provision
Regulators would be
No provision
No provision
No provision
requirements
p r o h i b i t e d f r o m
exempting lending
institutions from the
reporting requirements
of HMDA. Current
exemptions would
cease to be effective
upon the enactment of
the bill.

CRS-6
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
Truth in Lending Act Amendments
Definition of
D e f i n e s a
Defines a high cost
Defines a covered
Defines a covered
Defines a covered
h i g h c o s t
c o v e r e d
m o r t g a g e a s a
mortgage as a loan
mortgage as a loan
mortgage as a loan
mortgage
mortgage as a
mortgage loan
s e c u r e d b y t h e
s e c u r e d b y t h e
secured by the
loan secured by
s e c u r e d b y t h e
principal residence of
principal residence of
principal residence
the principal
principal residence of
the borrower, but
the borrower, but
of the borrower,
residence of the
the borrower, but
which is not used for
which is not used for
but which is not
borrower, but
which is not used for
the purchase of the
the purchase of the
u s e d f o r t h e
which is not
the purchase of the
residence, and which
residence, and which
purchase of the
used for the
residence, and which
meets one of the
meets one of the
residence, is not a
purchase of the
meets one of the
following conditions:
following conditions:
reverse mortgage,
residence, and
following conditions:
( 1 ) t h e a n n u a l
(1) the transaction is
and which meets
which meets one
( 1 ) t h e a n n u a l
percentage rate on the
secured by a first
o n e o f t h e
of the following
percentage rate on the
loan exceeds the rate
mortgage on the
f o l l o w i n g
conditions: (1)
loan exceeds the
o n c o m p a r a b l e
consumer’s principal
conditions: (1) the
t h e a n n u a l
weekly average yield
Treasury securities by
residence and the
t r a n s a c t i o n i s
percentage rate
on 1-year Treasury
m o r e t h a n 8
annual percentage rate
secured by a first
on the loan
securities by more
percentage points, in
on the loan exceeds
mortgage on the
exceeds the rate
than 5 percentage
t h e c a s e o f a
the rate on comparable
c o n s u m e r ’ s
on comparable
p o i n t s , ( 2 ) t h e
transaction secured by
Treasury securities by
principal residence
T r e a s u r y
m o r t g a g e i s a n
a first-lien security
m o r e t h a n 6
and the annual
securities by
adjustable rate loan on
i n t e r e s t i n t h e
percentage points, (2)
percentage rate on
more than 10
w h i c h a n n u a l
p r o p e r t y , o r 9
the transaction is
the loan exceeds
p e r c e n t a g e
percentage rate is
percentage points, in
s e c u r e d b y a
t h e r a t e o n
points, or (2)
reasonably expected to
t h e c a s e o f a
subordinate mortgage
c o m p a r a b l e
the total points
increase by more than
transaction secured by
on the consumer’s
Treasury securities
and fees paid by
5 percentage points
a subordinate-lien
principal residence
by more than 6
the borrower at
above the weekly
s e c u r i t y i n t h e
a n d t h e a n n u a l
percentage points,
or before loan
average yield of 1-
property, or (2) the
percentage rate on the
(2) the transaction
closing exceed
y e a r T r e a s u r y
total points and fees
loan exceeds the rate
is secured by a
the greater of
securities, (3) the
paid by the borrower
o n c o m p a r a b l e
s u b o r d i n a t e
$451 or 8% of
potential or scheduled
at or before loan
Treasury securities by
mortgage on the
the total loan
increases in the annual
closing exceed the
m o r e t h a n 8
c o n s u m e r ’ s
amount. It does
percentage rate of the
greater of $451 or 8%
percentage points, or
principal residence

CRS-7
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
not refer to such
loan are controlled by
of the total loan
(3) the total points and
and the annual
mortgages as
the lender and are not
amount.
fees paid by the
percentage rate on
h i g h c o s t
directly tied to
b o r r o w e r w o u l d
the loan exceeds
mortgages.
changes in a publicly
exceed the greater of
t h e r a t e o n
available rate not
$1000 or 5% of the
c o m p a r a b l e
controlled by the
total loan amount.
Treasury securities
lender, or (4) the
P r o v i d e s t h a t
by more than 8
points and fees on the
introductory rates
percentage points,
l o a n c a n n o t b e
would not be taken
or (3) the total
financed.
into account.
points and fees
p a i d b y t h e
borrower would
exceed the greater
of $1000 or 5% of
the total loan
amount. Provides
that introductory
rates would not be
taken into account.
Calculation of
No provision
Provides that if the
No provision
No provision
I n c a l c u l a t i n g
points and fees
interest rate from
whether points and
which the loan is to be
fees exceed the
discounted does not
limits established
exceed by more than 1
a b o v e , w o u l d
percentage point the
provide that points
required yield on
and fees include all
comparable loans to
compensation paid
be delivered to Fannie
d i r e c t l y o r
Mae or Freddie Mac,
indirectly to a
then up to 2 discount
mortgage broker;
points payable by the
each of the charges
borrower may be
listed in Section
excluded from the
106(e) of the Truth
calculation of total
in Lending Act; the

CRS-8
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
points and fees; and
cost of premiums
further provides that if
financed by the
the interest rate from
lender for life,
which the loan is to be
credit, health,
discounted does not
u n e m p l o y m e n t ,
exceed by more than 2
disability, or health
percentage points the
insurance; and any
required yield on
p r e p a y m e n t
comparable loans to
penalty.
be delivered to Fannie
Mae or Freddie Mac,
then up to 1 discount
point payable by the
borrower may be
excluded from the
calculation of total
points and fees.
Definition of
Points and fees
Points and fees would
No provision
Points and fees would
Points and fees
points and fees
are defined to
be defined to include
be defined to include
would be defined to
include all items
all compensation paid
all compensation paid
mean (1) finance
included in the
directly or indirectly to
directly or indirectly to
charges (other than
finance charge
a mortgage broker,
a mortgage broker;
interest), as defined
except interest,
including a broker that
each of the charges
by the Federal
a
l
l
originates a loan in its
listed in Section
Reserve, (2) real
compensation
own name in a table-
106(e) of the Truth in
estate related fees,
p a i d t o
funded transaction.
Lending Act; the cost
as defined by the
m o r t g a g e
of premiums financed
Federal Reserve, if
brokers, and
by the lender for life,
the lender or an
each of the
c r e d i t , h e a l t h ,
affiliate receives
charges listed in
u n e m p l o y m e n t ,
direct or indirect
Section 106(e)
disability, or health
compensation, (3)
of the Truth in
insurance; and any
t h e c o s t o f
Lending Act.
prepayment penalty.
premiums financed
by the lender for

CRS-9
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
life, credit, health,
u n e m p l o y m e n t ,
disability, or health
insurance; (4) and
any prepayment
penalty.
Exclusions
No provision
Points and fees would
No provision
No provision
P o i n t s a n d f e e s
from
not include taxes, and
would not include
definition of
other charges for
fees paid to public
points and
obtaining the security
o f f i c i a l s i n
fees.
i n t e r e s t i n t h e
reference to the
property, or for fees
security interest, or
paid to parties other
fees paid for such
than the lender or
t h i n g s a s
mortgage broker (or
a p p r a i s a l s ,
their affiliates) for
surveys, property
such things as pest
inspections, and
i n s p e c t i o n s ,
flood certification,
a p p r a i s a l s ,
if the fees are not
inspections, notary
paid to the lender,
fees, or title, fire or
o r m o r t g a g e
f l o o d i n s u r a n c e
broker, or their
premiums.
associates.
Defining a
Includes in the
Would amend current
No provision
Would amend current
No provision
creditor
definition of
law to include in the
law to include in the
creditor any
definition of creditor
definition of creditor
p e r s o n w h o
any person who acted
any person who acted
originates 2 or
as a mortgage broker
as a mortgage broker
more mortgages
b e t w e e n l o a n
b e t w e e n l o a n
in any 12-month
o r i g i n a t o r s a n d
o r i g i n a t o r s a n d
period or any
borrowers on more
borrowers on more
p e r s o n w h o
than five homes within
than five homes within
originates one
the past 12 months.
the past 12 months,

CRS-10
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
o r m o r e
and any creditor
m o r t g a g e s
affiliated party would
t h r o u g h a
be considered a
m o r t g a g e
creditor.
broker.
D e f i n i n g
No provision
No provision
No provision
A creditor-affiliated
No provision
c r e d i t o r -
party would be defined
affiliated party
as (1) any director,
officer, employee,
c o n t r o l l i n g
stockholder, or agent
of a creditor, (2) any
person who has filed
or is required to file a
change of control for
an insured depository
institution, or (3) any
person who conducts
the affairs of or
controls the lending
practices of a creditor.
R e q u i r e d
Lenders must
No provision
This section of current
Lenders would have to
No provision
disclosures
p r o v i d e
law would be deleted.
provide borrowers
borrowers with
w i t h a d d i t i o n a l
d i s c l o s u r e s
disclosures which
which state:
state that (1) the
“You are not
interest rate on the
r e q u i r e d t o
loan is higher than
complete this
most people pay and
t r a n s a c t i o n
therefore the chance of
merely because
losing the home is
y o u h a v e
greater, (2) a lower
received these
interest-rate loan may

CRS-11
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
disclosures or
be available and
have signed a
borrower has the right
l
o
a
n
to seek counseling
application. If
services and consult
you obtain this
with other lenders to
loan, the lender
find a cheaper loan,
will have a
and (3) if the loan is
mortgage on
being taken to repay
y o u r h o m e .
other loans the
You could lose
borrower should look
your home, and
at the total payment
any money you
amount in addition to
have put into it,
the monthly payment.
if you do not
m e e t y o u r
o b l i g a t i o n s
under the loan.”
P r o h i b i t i n g
For a high cost
Would amend current
No provision.
Would amend current
A h i g h c o s t
b a l l o o n
m o r t g a g e
law to strike “having a
law to strike “having a
mortgage would be
mortgages
having a term of
term of less than 5
term of less than 5
prohibited from
less than 5
years.”
years.”
having terms under
y e a r s , t h e
w h i c h a n y
p a y m e n t
scheduled payment
schedule must
is more than twice
be such that the
the average of all
l o a n i s
other scheduled
c o m p l e t e l y
payments.
repaid at the
end of the loan
term.

CRS-12
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
P r o h i b i t i n g
No provision
Would provide that a
No provision
Would provide that a
Would provide that
lender call
high cost mortgage
high cost mortgage
a h i g h c o s t
provisions
could not include
could not include
mortgage could not
terms which give the
terms which give the
i n c l u d e t e r m s
lender the option of
lender the option of
which give the
p r e m a t u r e l y
p r e m a t u r e l y
lender the option of
d e m a n d i n g f u l l
d e m a n d i n g f u l l
p r e m a t u r e l y
repayment of the loan
repayment of the loan
demanding full
except in cases of
except in cases of
repayment of the
default or some other
bona fide default.
loan except in
provision unrelated to
cases of default, a
the payment schedule.
d u e - o n - s a l e
provision, or some
other provision
unrelated to the
payment schedule.
No fees for
No provision
Lenders would be
No provision
Lenders would be
Lenders would be
l
o
a
n
p r o h i b i t e d f r o m
p r o h i b i t e d f r o m
prohibited from
modifications
charging borrowers a
charging borrowers a
c h a r g i n g t h e
fee for modifying the
fee for modifying the
borrower any fee
terms or deferring the
terms or deferring the
for modifying,
payments due on a
payments due on a
r e n e w i n g ,
high cost mortgage.
high cost mortgage
e x t e n d i n g , o r
unless (1) the action
amending the terms
would provide a
of a high cost
material benefit to the
mortgage, or for
borrower and (2) the
d e f e r r i n g t h e
fee does not exceed
payments due on
0.5% of the total loan
such a mortgage.
amount or, in the case
of a loan of $60,000
or less, the fee does
not exceed $300.

CRS-13
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
C o u n s e l i n g
No provision
Lenders would be
No provision
Lenders would be
Lenders would be
requirement
p r o h i b i t e d f r o m
p r o h i b i t e d f r o m
prohibited from
originating a high cost
originating a high cost
originating a high
mortgage prior to
mortgage unless the
cost mortgage
receiving certification
borrower has been
unless the lender
from a HUD-certified
provided with (1) all
h a s r e c e i v e d
housing counseling
w a r n i n g s a n d
certification that
agency that the
disclosures regarding
the borrower has
borrower has received
the risks of the
received counseling
counseling on the
mortgage, (2) a
on the advisability
advisability of the
s e p a r a t e w r i t t e n
of the transaction
transaction.
s t a t e m e n t
from a counselor
recommending that the
approved by HUD,
b o r r o w e r t a k e
a state housing
advantage of home
finance agency, or
ownership and credit
other appropriate
counseling prior to
regulatory agency.
agreeing to the terms
of the mortgage, and
(3) a written statement
containing the names,
a d d r e s s e s a n d
telephone numbers of
certified or approved
counseling agencies.
No mandatory
No provision
A high cost mortgage
No provision
A high cost mortgage
A h i g h c o s t
arbitration
w o u l d n o t b e
w o u l d n o t b e
mortgage would
permitted to include
permitted to include
not be permitted to
terms under which a
t e r m s r e q u i r i n g
include terms under
mandatory arbitration
arbitration or other
which a mandatory
clause limits the right
nonjudicial procedures
arbitration clause
of the borrower to
as the method of
limits the right of
seek relief through the
resolving disputes.
the borrower to
courts.
This provision would
seek relief through

CRS-14
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
not, however, preclude
the courts.
borrowers from using
arbitration or other
nonjudicial methods
for settling disputes.
N o m o r t g a g e
p r o v i s i o n o r
agreement between the
parties would be
i n t e r p r e t e d a s
preventing a borrower
from bringing court
a c t i o n t o s e e k
damages or other
relief.
P r o h i b i t i n g
No provision
T h e m o r t g a g e
No provision
In general, would
No provision
evasions
requirements of TILA
prohibit lenders from
would apply to parties
taking any action,
who (1) seek to evade
such as (1) reciprocal
c o v e r a g e b y
arrangements with
s t r u c t u r i n g t h e
other lenders or
transaction as an
d i v i s i o n o f t h e
open-end credit plan
t r a n s a c t i o n i n t o
when the loan would
separate parts, with
have been a high cost
the intent to evade
mortgage if structured
coverage under TILA,
as a closed-end loan,
(2) structuring or
( 2 ) d i v i d e t h e
r e s t r u c t u r i n g a
t r a n s a c t i o n i n t o
c o n s u m e r c r e d i t
separate parts with the
transaction as another
intent of evading
loan form such as a
coverage under TILA,
business loan with the
or (3) engage in any
intent to evade
other subterfuge to
coverage under TILA
evade coverage.
or (3) any action

CRS-15
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
which Federal Reserve
Board regulations
define as constituting
bad faith efforts to
evade or circumvent
TILA requirements.
The Federal Reserve
Board would be
directed to prescribe
such regulations.
Due diligence
No provision
No provision
No provision
No provision
W o u l d d i r e c t
p a r t i e s w h o
purchase interests
i n h i g h c o s t
m o r t g a g e s t o
e x e r c i s e d u e
d i l i g e n c e i n
d e t e r m i n i n g
w h e t h e r t h e
requirements of
TILA have been
met.
Prohibition on
No provision
Lenders would be
Lenders would be
Lenders would be
For all mortgages,
encouraging
p r o h i b i t e d f r o m
p r o h i b i t e d f r o m
p r o h i b i t e d f r o m
w o u l d a m e n d
default
encouraging default on
encouraging default on
encouraging default on
current law to
existing debt on
existing debt on high
existing debt on high
prohibit lenders
c o n v e n t i o n a l
cost mortgages.
cost mortgages.
from encouraging
mortgages.
default on existing
debt prior to or in
connection with a
loan that refinances

CRS-16
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
that existing debt
and would prohibit
the loans from
including terms
under which the
interest rate that
a p p l i e s a f t e r
default is higher
than the rate that
applies before
default.
Liability for
F a i l u r e t o
Would provide that
No provision
No provision
No provision
damage
comply with the
t h e m a x i m u m
Act’s provisions
damages could be the
r e g a r d i n g
greater of (1) the
c e r t a i n
amount determined
mortgages may
under current law or
result in the
(2) the principal and
lender being
the finance charge on
l i a b l e f o r
the mortgage.
damages for the
sum of all
finance charges
and fees paid by
the borrower.
P r e p a y m e n t
A high cost
No provision
Would delete items (1)
Would provide that
W o u l d a m e n d
penalties
mortgage may
and (2) under current
prepayment penalties
current law to
c o n t a i n
law, and amend the
may not exceed 3% of
p r o h i b i t
p r e p a y m e n t
l a w t o p e r m i t
the loan amount and
p r e p a y m e n t
penalties if (1)
prepayment penalties
that no prepayment
penalties on all
the borrower’s
as long as (1) the
penalties are permitted
mortgages which
monthly debt
penalty does not
if the loan is repaid
f i n a n c e t h e
p a y m e n t s
exceed 3% of the loan
after a 2-year period.
p u r c h a s e o r
(including the
a m o u n t w h e n
Within that 2-year
construction of the

CRS-17
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
mortgage) is not
prepayment occurs
period, no penalties
b o r r o w e r ’ s
greater than
during the first year of
would be permitted if
residence.
50% of the
the loan, (2) the
the borrower financed
b o r r o w e r ’ s
penalty does not
points and fees that
gross income
exceed 2% of the loan
total 3% or more of
a n d t h e
a m o u n t w h e n
the mortgage amount.
b o r r o w e r ’ s
prepayment occurs
i n c o m e a n d
during the second year
expenses have
of the loan, or (3) the
been verified,
penalty does not
( 2 ) t h e
exceed 1% of the loan
mortgage is not
a m o u n t w h e n
being prepaid
prepayment occurs
w i t h f u n d s
during the third year
obtained by
of the loan. Would
refinancing the
prohibit penalties on
loan from the
loans prepaid after the
same lender or
third year.
o n e o f i t s
affiliates (3) the
penalty does not
apply after 5
years, and (4)
the penalty is
not prohibited
under other law.

CRS-18
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
P r o h i b i t i n g
A high cost
No provision
Would amend current
No provision
Identical to current
a d v a n c e
mortgage may
law to provide that no
law.
payments
n o t i n c l u d e
required payments
terms under
may be paid in
which more
advance from the loan
t h a n t w o
proceeds.
r e q u i r e d
payments are
paid in advance
from the loan
proceeds.
L i m i t i n g
No provision
No provision
Would amend current
No provision
No provision
refinancing
law to provide that a
mortgage which is less
than 1 year old may
not be refinanced with
a high cost mortgage
unless all points and
fees are based solely
o n t h e n e w
transaction, or the
annual percentage rate
i s 2 o r m o r e
percentage points
lower than the rate on
the existing loan.
Reporting to
No provision
No provision
W o u l d r e q u i r e
No provision
No provision
credit bureaus
quarterly reports of
both favorable and
unfavorable payment
history regarding
borrowers with high
cost mortgages.

CRS-19
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
No profiting
No provision
No provision
L e n d e r s w o u l d b e
No provision
No provision
f
r
o
m
p r o h i b i t e d f r o m
foreclosures
profiting from the
foreclosure sale of
property secured by
high cost mortgages.
P r o v i d i n g
No provision
No provision
Would require that
No provision
No provision
p a y o f f
lenders holding high
information
c o s t m o r t g a g e s
provide borrowers
payoff information
within 3 business days
of receiving such a
request.
A s s e s s i n g
Lenders are
No provision
No provision
Would amend current
Would prohibit
ability to pay
prohibited from
law to require that the
h i g h c o s t
making high
lender determine that
mortgages unless
cost mortgages
one or more of the
the lender has
without regard
borrowers will be able
verified that, after
t o t h e
to make the scheduled
obtaining the loan,
b o r r o w e r ’ s
payments without
the borrower’s
ability to repay
regard to the equity in
total monthly debt
the obligation.
the property.
would not exceed
5 0 % o f t h e
b o r r o w e r ’ s
monthly gross
income.

CRS-20
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
D e l i v e r i n g
Any mortgage
No provision
No provision
A high cost mortgage
No provision
disclosures
which contains
which contains a
a p r o v i s i o n
provision prohibited
prohibited by
by this section or does
this section of
not contain a provision
the Act will be
required by the
deemed to have
section, or a lender
failed to deliver
who fails to comply
the required
with this section by
disclosures.
act or omission will be
treated as a failure to
deliver the required
disclosures.
P r o h i b i t i n g
No provision
No provision
No provision
Would prohibit high
Would prohibit all
single premium
cost mortgages from
mortgages under
insurance.
being written which
which any credit
require the advance
l i f e , c r e d i t
payment of a single
disability, credit
premium for insurance
unemployment, or
on the life, health,
other life or health
e m p l o y m e n t , o r
i n s u r a n c e i s
property of the
financed in the loan
borrower regardless of
e x c e p t f o r
whether the insurance
insurance paid
would be paid by the
monthly by the
borrower or added to
borrower which
the mortgage.
may be canceled at
any time at the
option of the
borrower.

CRS-21
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
L i m i t s o n
No provision
No provision
No provision
Subject to current law, Lenders would be
f i n a n c i n g
points and fees that
prohibited from
points and fees
may be financed on a
originating high
high cost mortgage
cost mortgages that
would be limited to the
d i r e c t l y o r
greater of $600 or 3%
indirectly finance
of the loan amount.
(1) any prepayment
Lenders would be
penalties if the
p r o h i b i t e d f r o m
mortgage is being
f i n a n c i n g a n y
prepaid with funds
prepayment penalties
o b t a i n e d b y
if the mortgage is
refinancing a high
being prepaid with
rate loan from the
funds obtained by
same lender or one
refinancing a high rate
of its affiliates, (2)
loan from the same
any points and
lender or one of its
fees, or (3) any
a f f i l i a t e s .
o t h e r c h a r g e s
Additionally, lenders
payable to third
would be prohibited
parties.
from financing any
point, fees or other
charges if the new
mortgage is being
obtained to refinance a
high rate loan from the
same lender or one of
its affiliates.

CRS-22
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
R i g h t o f
Provides that,
No provision
No provision
Would provide that a
No provision
rescission
on any credit
borrower’s waiver of
t r a n s a c t i o n
the right of rescission
w h i c h i s
would not be effective
secured by the
if (1) the waiver was
p r i n c i p a l
required by the lender
residence of the
as a condition of the
borrower, the
loan, (2) the lender
borrower has
advised or encouraged
the right to
the borrower to waive
r e s c i n d t h e
the right of rescission,
contract within
or (3) the lender had a
3 business days.
discussion with the
borrower about the
waiver during a period
to be determined by
the Federal Reserve
Board.
I n d i v i d u a l
Provides that
No provision
No provision
Would amend the law
No provision
damages
for a violation
t o p r o v i d e t h a t
o f T I L A
damages for an
involving a
individual may be up
t r a n s a c t i o n
to $10,000.
secured by a
dwelling or real
p r o p e r t y a n
individual may
b e a w a r d e d
damages of not
less than $200
or greater than
$2,000.

CRS-23
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
Class action
Provides that in
No provision
No provision
Would amend the law
No provision
damages
a class action
to provide that
i n v o l v i n g
damages would be the
violations of
greater of (1) $10,000
TILA damages
times the number of
may be the
individuals in the class
l e s s e r o f
or (2) 2% of the net
$500,000 or 1%
worth of the lender.
of the net worth
of the lender.
Preemption of
No provision
No provision
Would provide that
No provision
No provision
state law
the provisions enacted
under this bill could
not be preempted by
any state law.
S t a t u t e o f
Provides that a
No provision
No provision
Amends the law to
No provision
limitations
borrower may
p r o v i d e t h a t a
bring a court
borrower may bring a
a c t i o n f o r
court action within 3
violations of
years of the violation.
TILA within 1
year of the
violation.
G e n e r a l
No provision
Would amend TILA to
W o u l d a m e n d
prohibitions on
provide the following
current law to
a l l h o m e
l i m i t a t i o n s a n d
apply the following
p u r c h a s e
p r o h i b i t i o n s t o
prohibitions and
mortgage loans
c o n v e n t i o n a l
limitations to all
o r a l l
mortgages which
mortgage loans
m o r t g a g e s
qualify for sale to
which finance the
which qualify
Fannie Mae: (1)
p u r c h a s e o r
for sale to
lenders would be
construction of the
Fannie Mae
p r o h i b i t e d f r o m
b o r r o w e r ’ s

CRS-24
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
charging fees for early
r e s i d e n c e : ( 1 )
payoff of mortgages,
would prohibit
(2) mortgages may not
p r e p a y m e n t
have a payment
p e n a l t i e s f o r
schedule which would
paying all or part
cause the loan balance
of the principal
to increase, (3) a
before the due date
lender may not engage
(2) would prohibit
in the practice of
l e n d e r s f r o m
extending mortgages
e n c o u r a g i n g
without regard to the
default on existing
borrower’s ability to
debt prior to or in
make the scheduled
connection with a
payments, (4) lenders
loan that refinances
would be prohibited
that existing debt
from refinancing
and would prohibit
c o n v e n t i o n a l
the loans from
mortgages when there
including terms
is no tangible financial
under which the
b e n e f i t t o t h e
interest rate that
borrower, (5) lenders
a p p l i e s a f t e r
would be prohibited
default is higher
from encouraging
than the rate that
default on existing
applies before
debt on conventional
default, (3) would
mortgages, (6) lenders
prohibit mortgages
would be prohibited
under which any
f r o m t r y i n g t o
credit life, credit
influence the real
disability, credit
e s t a t e a p p r a i s e r
unemployment, or
e v a l u a t i n g t h e
other life or health
c o n v e n t i o n a l
i n s u r a n c e i s
mortgage, (7) lenders
financed in the loan
would be prohibited
e x c e p t f o r
from financing credit,
insurance paid
h e a l t h , o r l i f e
monthly by the

CRS-25
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
i n s u r a n c e i n
borrower which
c o n v e n t i o n a l
may be cancelled at
mortgages, and (8) if a
any time at the
conventional mortgage
option of the
is negotiated in a
borrower, and (4)
language other than
would prohibit
English, then the
l e n d e r s f r o m
borrower must be
refinancing existing
p r o v i d e d w i t h
mortgages unless
disclosures that are
the new loan would
written in that
be of tangible net
language.
benefit to the
borrower when
considering the
terms of both
loans, the cost of
the new loan, and
the ability of the
borrower to repay
the new loan.
Fair Credit Reporting Act Amendments
Reporting to
No provision
No provision
No provision
Would provide that
No provision
credit bureaus
lenders involved in
high cost mortgages
report the payment
history of borrowers
to nationwide credit
reporting agencies at
least quarterly or more
frequently as required
by regulation or by the
g u i d e l i n e s o f
participants in the
secondary mortgage
market.

CRS-26
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
Real Estate Settlement Procedures Act Amendments
F o r m f o r
D i r e c t s t h e
No provision
Would amend the law
No provision
No provision
statement of
regulators to
to read “Such form
s e t t l e m e n t
p r e s c r i b e a
shall conspicuously
costs
standard form
and clearly itemize all
f o r t h e
charges imposed
statement of
directly upon the
settlement costs
borrower and all
and provides
charges imposed
that “such form
directly upon the seller
s
h
a
l
l
(whether paid outside
conspicuously
o f c l o s i n g o r
a n d c l e a r l y
o t h e r w i s e ) i n
i t e m i z e a l l
connection with the
c h a r g e s
s e t t l e m e n t . T h i s
imposed upon
subsection shall not be
the borrower
construed to require
and all charges
that the standard form
imposed upon
shall itemize fees
the seller in
e a r n e d b y a n y
connection with
settlement service
the settlement
provided in connection
...”
with the transaction to
the extent such fees
are paid by the lender
and reflect the present
value of interest
y i e l d e d b y t h e
federally related
mortgage loan.”

CRS-27
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
Booklet for
Directs HUD to
No provision
Would amend the law
No provision
No provision
consumers
prepare and
to require that the
distribute a
booklet include an
booklet to help
explanation of the fact
b o r r o w e r s
that a mortgage broker
understand the
may be compensated
nature and cost
for its services by
of
payments from the
r e a l e s t a t e
b o r r o w e r , b y
s e t t l e m e n t
payments from the
services.
lender, or by some
combination of both.
Good faith
Directs lenders
No provision
Would amend present
No provision
No provision
estimate of
to include a
law to direct lenders to
s e t t l e m e n t
g o o d f a i t h
include a good faith
costs
estimate of the
estimate of the amount
a m o u n t o f
of settlement charges
s e t t l e m e n t
“likely to be imposed
c h a r g e s “ a
directly upon the
borrower is
borrower.”
likely to incur.”
Disclosures in
No provision
No provision
Would amend the law
No provision
No provision
g o o d f a i t h
to require that the
estimate
good faith estimate
include the following
statement, “If you
obtain this loan, the
lender will have a
mortgage on your
home. You could lose
your home, and any
money you have put
into it, if you do not

CRS-28
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
meet your obligations
under the loan.”
Miscellaneous Amendments
A d d i t i o n a l
No provision
No provision
No provision
No provision
W o u l d p r o v i d e
enforcement
that, in addition to
authority
existing penalties,
violations of the
Truth in Lending
Act covering high
cost mortgages
would be subject to
penalties contained
i n t h e B a n k
Holding Company
Act of 1956.
Unfair and
No provision
No provision
No provision
No provision
Would provide that
d e c e p t i v e
a creditor would be
practices
deemed to have
engaged in an
unfair or deceptive
act or practice
under the Federal
Trade Commission
A c t i f i t
intentionally: (1)
structures a high
cost mortgage as
an open end credit
plan, (2) provides
m i s l e a d i n g
information to a
c o n s u m e r o r
otherwise engages
i n f r a u d u l e n t

CRS-29
H.R. 4250/S. 2415
H.R. 4213, the
Predatory Lending
S. 2405, the
H.R. 3901, the Anti-
Consumer Mortgage
Consumer
Predatory
Predatory Lending
Protection Act of
Protection Act of
Lending
Provision
Current law
Act of 2000
2000
2000
Deterrence Act
behavior, or (3)
engages in any
subterfuge intended
to misrepresent the
t e r m s o f t h e
agreement.
M e e t i n g
No provision
No provision
No provision
No provision
Would provide that
c o m m u n i t y
high cost loans
needs
may not be counted
t o w a r d s
d e t e r m i n i n g
w h e t h e r a n
i n s t i t u t i o n i s
m e e t i n g i t s
C o m m u n i t y
Reinvestment Act
requirement to
serve the lending
n e e d s o f i t s
c o m m u n i t y .
Violations would
be enforced by the
F e d e r a l T r a d e
Commission.