Pa. legislature rescinds Philly anti-predatory lending ordinance

PHILADELPHIA – After unanimously passing a bill in April that placed tough restrictions on subprime loans, the Pennsylvania state legislature did an about-face and passed a bill overturning Philadelphia’s anti-predatory lending regulation. Specifically, the new law-H.B. 1703-pertains to loans with rates 4.5 percentage points above Treasury securities of comparable maturity. The original law would have taken effect in July. The new law goes into effect in one year. In a statement released to the press, ACORN, the Association of Community Organizations for Reform Now President Carol Hemingway said, “This bill is the result of an unbelievable and unholy alliance between the mainstream banks that fail to lend in our neighborhoods, and the predators like Household Finance that make abusive loans. This is a bill written by an industry that does nothing to protect a single consumer. It’s too bad that some legislators in Harrisburg have chosen to overturn the will of the citizens of Philadelphia and deny us protections against abusive loans.” In addition to preempting the anti-predator law, H.B. 1703 gives the state’s banking regulator new powers in regulating mortgage companies, and applies federal high-cost loan regulations statewide. ACORN said the bill was “misleadingly” called the Consumer Equity protection Act “and was well-crafted to look like it had real protections although it’s just codified HOEPA at the state level.”