WASHINGTON-U.S. Senator Debbie Stabenow (D-MI) today became an original cosponsor of legislation to combat predatory lending and protect borrowers from unscrupulous lenders.
The Predatory Lending Consumer Protection Act of 2002 has the support of numerous community and fair-housing groups who have been actively involved in nationwide efforts to combat predatory lending.

"Predatory lending is a sophisticated form of deception that steals not only people's money, but their dreams for homeownership and their opportunity to build a better future for themselves and their families," said Stabenow. "This legislation expands current laws to provide important protections for consumers who might otherwise fall victim to unscrupulous lending practices."

Current laws contain some protections for borrowers and homeowners, yet many of the safeguards do not kick in until a loan meets a predetermined high-cost threshold. Up to this point, many lenders have been able to structure high-cost loans to avoid compliance with the law. The Predatory Lending and Consumer Protection Act of 2002 creates a new, more expansive definition of a high-cost loan that will trigger a more comprehensive set of protections, ultimately benefiting a greater number of borrowers.

"As a member of the Senate Banking Committee, I have been working since I came to the Senate to combat predatory lending. I have heard from people throughout Michigan about the problems they have faced because of lending scams. Many have lost money--some have even lost their homes. I am proud to be a cosponsor of this legislation, which has come about after tireless efforts by many on the Banking Committee."

A leader in the effort to combat predatory lending, Senator Stabenow has held a number of Michigan community forums to raise awareness of the issue and to bring together local leaders in an effort to find new ways to combat it. Late last year, the Senator was joined by the Freddie Mac Corporation in kicking off Don't Borrow Trouble, a local public education effort to help the public recognize and avoid unscrupulous lenders. This effort has already helped hundreds get the information they need to protect themselves and their families.

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