March 22, 2000
WASHINGTON, D.C.. – In a speech to the National Community Reinvestment Coalition today, Federal Reserve Chairman Allan Greenspan criticized predatory lending, a practice by some mortgage and home-equity loan companies of targeting low-income borrowers and charging them unfairly high fees and interest rates.
Frank Torres, legislative counsel for Consumers Union, made the following statement today in response to Greenspan’s speech:
“Congress knows predatory lending is a problem The Clinton administration knows this is a problem. Now the chairman of the Federal Reserve himself is saying this is a problem. So, when are we going to see laws, regulation, and enforcement to put a stop to it?
“Actions speak louder than words. Regulators need to back up what they say by targeting these predators and changing the conditions that allow them to carry on their business. They need to do more to make sure that low- and moderate-income Americans understand their financial obligations and options.
“When the Gramm-Leach-Bliley bill became law, the financial service industry promised that its customers would see better products and services. Yet some companies persist in trying to trap people with these rip-off loans by targeting specific neighborhoods and segments of the population.
“All consumers deserve fair loans with fair rates. It’s time for policymakers to turn their words into action to bring an end to this abusive practice once and for all.”