US 2003 Enacted Predatory Mortgage & Subprime Lending Legislation Resources

US 2003 Enacted Predatory Mortgage & Subprime Lending Legislation Resources in United States

US 2003 Enacted Predatory Mortgage & Subprime Lending Legislation Resources

Arkansas H.B. 2598
Signed by governor 4/16/03, Act 1340
Creates the Arkansas Home Loan Protection Act.
 Colorado H.B. 1237
Signed by governor 5/22/03, Chapter 295
Concerns technical modifications to the statutes enforced by the administrator of the Uniform Consumer Credit Code, and, in connection therewith, amends or repeals obsolete, inconsistent, and conflicting provisions of law, including provisions prohibiting predatory lending practices.
H.B. 1298
Signed by governor 4/29/03, Chapter 203
Clarifies the conditions under which a court may find that a mortgage is unconscionable. In order to support a court’s finding of unconscionability regarding the terms of a mortgage, the bill specifies that any:  (1) Overreaching on the part of the mortgage broker or mortgage originator must be in bad faith; (2) Inequality of bargaining power must be unreasonable; and (3) Contract terms that unreasonably favor the mortgage broker, mortgage originator, or lender must be analyzed pursuant to the standards of the industry.  Prohibits enforcement of claims concerning mortgage unconscionability against public trustees in foreclosure actions and bona fide purchasers.
Connecticut S.B. 984
Signed by governor 6/3/03, Public Act 03-61
Updates the bonding requirements of the “Money Transmission Act” and exempts Connecticut-chartered banks and credit unions from licensure under the act, regardless of whether they are federally-insured; provides that the notice of right to cancel certain insurance products required by the high cost home loan provisions be in not less than 12-point type and be sent separately to the borrower by mail; and makes certain technical and clarifying changes
District of Columbia PR15-0201
Approved 5/6/03, Resolution 15-102
Calls upon the United States Congress to not preempt state and local laws in the country that protect consumers against predatory lending.
Georgia S.B. 53
Signed by governor 3/7/03, Act 1
Amends the Georgia Fair Lending Act; provides for revisions to certain definitions; provides for changes in limitations on late payment charges; specifies when a reasonable, tangible net benefit occurs; clarifies that certain home loan refinancing shall not be presumed to be a flipping; provides for reasonable attorneys’ fees; provides for liability of creditors for violations of the Act; provides for certain exceptions and limitations consistent with federal law; provides the Department of Banking and Finance with express authority to promulgate rules and regulations; provides for good faith reliance on guidance from the Department of Banking and Finance.
S.B. 78
Signed by governor 6/4/03, Act 376
Provides for the use of a collection agency to collect fees owed to the state; provides for the disclosure of a bank’s examination information to its holding company; provides for changes in dissolution proceedings; enables a bank or trust company to organize as a limited liability company; provides for minimum capital stock requirements for established banks and trust companies; requires compliance with minimum age laws for mergers; authorizes all banks to operate automated teller machines statewide; provides for certain changes in preferred shares of credit unions; provides for certain definitions related to the sale of checks; provides for a license to sell checks to include a license for the business of money transmission; makes changes in the requirements for licenses to transmit money; makes changes in the bonding requirements for licenses; provides for examination by the Department of Banking and Finance of businesses selling checks or transmitting money; establishes record-keeping requirements; provides for cease and desist orders for unlicensed businesses; conditions the exemption of certain employees from licensing requirements for mortgage lenders and brokers; changes the financial requirements for licensing and registration; prohibits certain officers from conducting mortgage business after suspension or revocation of a license; makes changes in the information provided to the public related to licensees or registrants; provides for enforcement for violation of the “Georgia Fair Lending Act”; provides for enforcement of an order of the department; provides for cease and desist orders for bond cancellation and for the rescinding of such orders upon bond reinstatement; requires the payment of fees established by the department as a condition to organize, own, or control a credit card bank.
Illinois S.B. 1784
Signed by governor 8/20/03, Public Act 93-0561
Creates the High Risk Home Loan Act to protect borrowers who enter into high risk home loans from abuses that occur in the credit marketplace.  Provides guidelines for lenders in the transferring, dealing in, offering, or making of a high risk home loan.  Provides for enforcement by the Department of Financial Institutions and the Office of Banks and Real Estate.  Preempts home rule.
Kentucky H.B. 287
Signed by governor 3/12/03
Regulates mortgage lending practices.
Louisiana H.B. 625
Signed by governor 7/1/03, Act 924
Allows brokers to collect the submission fee, up to $25, for loan approvals assessed by Fannie Mae or Freddie Mac in addition to the fees listed in existing law.
H.R. 103
Passed House 6/1/03
Requests the Office of Financial Institutions to promulgate rules and regulations to increase public awareness of prohibited predatory lending practices.
Maine L.D. 494
Signed by governor 4/17/03, Public Law Chapter 49
Amends the law related to the provision of high-rate, high-fee mortgages. Enhances consumer protections, retains the state’s already stringent regulatory oversight by the Office of Consumer Credit Regulation and preserves availability of such mortgages in the marketplace.
L.D. 614
Signed by governor 5/23/03, Public Law Chapter 263
Permits state-chartered financial institutions and mortgage companies to assess prepayment charges on mortgage loans except for high-rate, high-fee mortgages.  Requires the Department of Professional and Financial Regulation, Office of Consumer Credit Regulation and Bureau of Financial Institutions to jointly adopt rules relating to the ability of supervised financial organizations to assess prepayment charges.
Nebraska L.B. 218
Signed by governor 3/20/03
Prohibits predatory practices in the mortgage loan industry and to increase the authority of the Nebraska Department of Banking and Finance to take action against persons engaged in predatory lending practices. Amends §45-702, which is the definitional section of the Mortgage Bankers Registration and Licensing Act (“Mortgage Bankers Act”), to remove installment loan licensees from the definition of “financial institution.” Amends §45-704 to provide that registrations under the Mortgage Bankers Act will expire on the next March 1; to allow for a renewal of registrations; and to provide for a renewal fee of $50. Currently registrations under the Act do not expire. A grace period for those registrants is set until March 1, 2004.
Nevada A.B. 284
Signed by governor 6/10/03, Chapter 465
Prohibits certain acts by lenders of home loans as unfair lending practices; provides for enforcement by the attorney general; prohibits a trustor from directing a trustee to exercise a power of sale of real property under certain circumstances; prohibits certain agencies, boards, commissions or political subdivisions from regulating certain acts relating to lending; provides a penalty.
New Jersey A.B. 75
Signed by governor 5/1/03, Public Law Chapter 64
Prohibits certain lending practices in regard to home loans, covered home loans and high cost home loans, directs the Department of Banking and Insurance, in consultation with the Divisions of Consumer Affairs and Civil Rights, to develop and implement a program of consumer education to protect vulnerable consumers against practices regarding high-cost home loans, and provides that the department and the Division of Consumer Affairs shall enforce the provisions of the bill. Practices prohibited with respect to all home loans include the following: a) financing of certain credit insurance premiums or debt cancellation agreements; b) recommending or encouraging default on an existing mortgage loan; c) charging a late payment fee in excess of 5 percent of the amount of the payment due and other prohibitions enumerated in the bill; d) acceleration of the indebtedness at the creditor’s sole discretion; and e) charging a fee for information concerning a borrower’s payoff balance. Prohibits, in regard to covered home loans, “flipping,” or the refinancing of a loan that was consummated within the prior 60 months and charging additional fees with no reasonable, tangible net benefit to the borrower.
A.R. 269
Passed Assembly 3/13/03
Memorializes the President and Congress to uphold states’ authority concerning predatory lending practices.
New Mexico S.B. 449
Signed by governor 4/11/03, Chapter 436
Relates to home loans; enacts the Home Loan Protection Act; prohibits certain practices by creditors; providing civil remedies.
North Carolina H.B. 1182
Signed by governor 8/7/03, Session Law 401
Expands the usury exemption; relates to equity lines of credit; provides consumer protection in certain high-cost home loans; allows prepayment fees.
Oklahoma H.B. 1574
Signed by governor 
5/30/03, Chapter 330
Modifies the Mortgage Broker Licensure Act; creates the Oklahoma Home Ownership and Equity Protection Act.
S.B. 329
Signed by governor 
Clarifies types of credit transactions for which deferral charges are authorized; clarifies how deferral charges may be calculated.
Pennsylvania H.R. 364
Adopted 7/18/03
Urges the secretary of Banking to study residential lending practices in the state and submit a report to the General Assembly.
Rhode Island S.R. 839
Passed Senate 4/2/03
Memorializes Congress regarding federal preemption of predatory lending legislation.
South Carolina S.B. 438
Signed by governor 6/3/03, Act 42
Enacts the South Carolina High-Cost and Consumer Home Loans Act; defines the subject loans; prohibits provisions in a high-cost home loan agreement for acceleration, balloon payment, negative amortization, interest increase, advance payments from loan proceeds, and additional fees in certain circumstances; requires a high-cost home loan lender to ensure that the borrower receives loan counseling and is reasonably able to meet his loan obligations; prohibits the financing of certain fees in connection with making a high-cost home loan and the charging of points and fees in connection with the refinancing of an existing high-cost home loan; regulates the payment of a home improvement contractor from the proceeds of a high-cost home loan; provides that a bad-faith violation of the high-cost home loan prohibitions or restrictions is an unfair or deceptive trade practice subject to Chapter 5 of Title 39; provides for enforcement by the administrator of the Department of Consumer Affairs, attorney general, commissioner of Banking, or a party to the loan; provides that the remedies and penalties for violations of the high-cost home loan restrictions and prohibitions are cumulative; provides for establishment of good faith by a high-cost home loan lender; provides certain restrictions and prohibitions in the making of a consumer home loan, including restrictions on the charging of points and fees and the prohibition of “flipping” a loan, financing certain insurance premiums, and encouraging default of a previous loan; provides that a violation of the consumer home loan restrictions or prohibitions is an unfair or deceptive trade practice; provides for enforcement by the administrator of the Department of Consumer Affairs, attorney general, commissioner of Banking, or a party to the consumer home loan; and provides for penalties and remedies, including attorneys’ fees, and to make them cumulative of and in addition to other remedies and penalties provided at law.
Tennessee H.B. 1745
Substituted by S.B. 1067 5/19/03
S.B. 1067
Signed by governor 6/11/03, Public Law Chapter 316
Extends the reporting deadline of a special joint committee created to perform comprehensive analysis of predatory lending from February 28, 2003, to February 28, 2004.
Texas S.B. 1067
Signed by governor 6/20/03
Authorizes the Finance Commission (SFC) to issue interpretations relating to the home equity lending law. Authorizes the Credit Union Commission (CUC) to issue interpretations applicable to lenders regulated by the CUC. Requires SFC and CUC to attempt to adopt interpretations that are as consistent as feasible or state justification for any inconsistency.
S.J.R. 42
Passed both houses 6/1/03
Proposes a constitutional amendment authorizing a home equity line of credit, provides for administrative interpretation of home equity lending law, and otherwise relating to the making, refinancing, repayment and enforcement of home equity loans.
Virginia S.B. 1103
Signed by governor 3/16/03
Contains recommendations of the Virginia Housing Study Commission to strengthen consumer protection measures in the Mortgage Lender and Broker Act. Allows the State Corporation Commission (SCC) to suspend individuals convicted of fraud or other crimes from working in the mortgage lending industry, and requires registered lenders and brokers to file with the SCC a notice of the filing of bankruptcy, denial or revocation of opportunity to engage in business in another state, or felony indictments.
Washington H.B. 1150
Signed by governor 5/7/03, Chapter 116
S.B. 5542
Prohibits an insurer from selling a single premium credit insurance policy in connection with a residential mortgage loan unless:  (1) the term of the policy and the loan are the same; (2) the debtor is given the option of paying for the insurance via monthly premiums; and (3) the terms of the insurance policy entitle the insured to a full refund of the premium if the insurance is canceled within 60 days of the inception of the loan.  This does not apply if the loan amount is $10,000 or less, the term of the loan does not exceed five years, and the term of the single premium credit insurance does not exceed the repayment term of the loan.

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