Oakland passes stiff predatory lending law

OAKLAND, Calif. – The Oakland City Council Oct. 2 unanimously passed an anti-predatory lending ordinance that regulates many of the most abusive practices that characterize predatory lending. Addressed in the law are loan flipping, high points and fees, prepayment penalties, the financing of single premium credit insurance, steering borrowers into higher cost loans, and making loans to consumers regardless of the borrower’s ability to repay. Furthermore, to educate borrowers before they take out loans, the ordinance requires mandatory loan counseling from HUD-certified loan counselors on all high cost loans. The Oakland antipredatory lending law also amends the existing Linked Banking Services Ordinance to make sure that the City does not use its funds on or do business with predatory lenders.