Mark Winston Griffith

Go Dodd, Go

God only knows who will gain my vote for President in 2008, but I can tell you right now that Candidate Dodd is speaking my language. Dodd, as the chair of the Senate Committee on Banking, Housing and Urban Affairs, recently held hearings on predatory lending. The hearings featured sharp and sophisticated analyses of subprime and exotic lending and frame the patterns of racial targeting found among predatory lenders as the latest form of redlining. Is someone in the federal government finally facing up to the reality of twenty-first century financial services?

Dodd of course offered disclaimers in his opening comments: "Let me make myself clear on one important point: I do not believe that all subprime or exotic lending is predatory or abusive." This was Dodd's way of trying to calm the banking lobby that is undoubtedly cueing up to pound on him with the fury of Thor's hammer.

Perhaps the most cogent testimony came from community reinvestment rock star, Martin Eakes, of North Carolina's Center for Responsible Lending (CRL) and Self Help Credit Union. Eakes' CRL offered a policy response that Dodd and company should strongly consider:

To address the epidemic of foreclosures in the subprime market, CRL and our allies are calling for (1) an "ability to repay" standard for all loans to ensure that borrowers can afford them for the long term, not just for the initial teaser period; (2) a fiduciary duty for brokers; (3) regulatory action by the Federal Reserve, which has long held the authority to address abusive mortgages; (4) prohibitions against allowing government-sponsored enterprises, Fannie Mae and Freddie Mac, from getting affordable housing credit for purchasing securities that include abusive subprime loans; and (5) the passage of a strong national anti-predatory lending law that would provide higher minimum standards for subprime loans.

If Dodd can bring all of this about, he will do more than establish himself as an effective lawmaker. He will actually help create legislation that will make a difference.

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Posted at 10:30 AM, Feb 09, 2007 in
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