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Press Release Wednesday, March 22, 2000 |
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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."
Consumers Union, publisher of Consumer Reports magazine, is an independent, nonprofit testing and information-gathering organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
