Memphis Anti-Predatory Group Sets Sights On Mortgage Lenders, Payday Loan Institutions
By Desmond CarlislePayday Loan Writer
A predatory mortgage lending bill ready is become law in Tennessee, but the Memphis-Shelby County Anti-Predatory Lending Coalition isn't finished.
The group zeroed in on new targets Wednesday as members suggested aiming at required free counseling for high-cost mortgage borrowers, as well as payday loan abuses, and bringing people up to speed on the new legislation.
"The prevailing wisdom didn't give [legislation governing high-cost home loans] a chance to pass," said Webb Brewer, lawyer with Memphis Area Legal Services, a proponent of the bill.
"We went against the power structure of Tennessee, the big money boys, the big time lobbyists and we won," said Warner Dickerson, member from the NAACP. "We won because we had a coalition."
Gov. Phil Bredesen is expected to sign the bill within the next two weeks. With its protections scheduled to take effect Jan. 1, the law also imposes a huge burden on lenders, some of whom may stop subprime lending altogether because of it, industry experts say.
The coalition has fought hard in lobbying the Tennessee Department of Financial Institutions to combat predatory practices. Coalition members also want to add additional measures, starting with free counseling, that weren't included in the initial bill for practical reasons. For instance, only half of Tennessee counties have qualified counselors.
Mortgages aren't the only area the group is out to stop, as many consider auto title and fast cash advance lending to be a bigger abuse. State law allows up to 20 percent a month for fees on top of the 2 percent a month interest rate cap — 264 percent in all.
An effort to get a law to lower the fees would be fertile ground for the coalition, and many are up to the challenge. The group also needs to make sure borrowers in search of a fast cash loan or mortgage know the new law, according to Martha Perine Beard, the head of the Memphis branch of the Federal Reserve Bank of St. Louis.
