Dodd Takes On Predatory Lending

by: Matt Browner Hamlin

Thu Feb 08, 2007 at 08:36:20 AM EST

However, it is not enough simply to create homeownership - we must sustain, preserve, and protect it as well. Yet, today, we are seeing increasing evidence that this important source of wealth for so many American families is under a grave threat from predatory, abusive, and irresponsible lending practices undertaken by too many subprime lenders.

The borrowers who are too frequently targeted for these loans are minorities, immigrants, the elderly, and the unsophisticated. For these families, failure means the loss of a home, the loss of wealth, the loss of middle class status, and the loss of the opportunity for financial security.
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It is time for the Congress, the Administration, and the lending industry to face up to the fact that predatory and irresponsible lending practices are creating a crisis for millions of American homeowners at a time when general economic trends are good.
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In short, the system is out of balance. There is a chain of responsibility that makes these abusive loans possible. I look forward to working with each link in that chain - the brokers, the bankers, Wall Street, the regulators, my colleagues on the Committee and in the Congress, and the Administration - to help restore this balance for the sake of the safety and soundness of the banking system; for the sake of the homeowners who are being victimized; and to make sure that subprime credit can, once again, play a constructive role in the marketplace.

As I've said before, Dodd's only hope as a presidential candidate is by using his bully pulpit in the Senate to lead by example. He has to keep showing us that he will fight for our interests in a way that other Democratic contenders are not or cannot. His recent work on the Banking Committee is evidence that he recognizes the dynamic between doing the right thing as a legislator and growing his presidential candidacy.