(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
LS-542Thank you, Secretary Cuomo. I am delighted to be here today representing Treasury Secretary Summers, who will be co-chairing our agencies' joint efforts to combat abusive lending practices. Later today, we will meet with the HUD-Treasury Task Force on Predatory Lending. The members of this task force will help us to gather important information around the country on lending practices.
A year ago, President Clinton and Secretary Rubin announced a plan for financial privacy and consumer protection for the 21 st century. The President called for expanded disclosure, enhanced protections, and new enforcement tools to combat abusive practices in the home mortgage lending arena. We have made progress, but much more remains to be done, and our meeting today is an important step.
As Secretary Summers has stated, in addressing problems in this area we need to be mindful of three key principles, and I quote:
First, we must empower consumers to make informed choices about borrowing.
Second, we must not let the abusive practices of some lenders undo the enormous progress that families have made thus far. Abusive practices should have no place in the subprime market, or any other market.
Third, we must continue the democratization of access to capital in this country that is helping more Americans own their own homes, start their own businesses, and strengthen their communities. Lenders are increasingly making credit available to low-income borrowers, and to those with limited or impaired credit histories who previously could not get access to credit.
Access to capital has grown during this Administration at a remarkable rate. Greater access to capital, especially for those who traditionally have not had access to capital, is crucial for American families and the American economy. But it is essential that credit be provided in a transparent and non-exploitative way. That is why we will work to find ways of maximizing credit access while avoiding predatory lending.
A critical component of expanding access to capital is a strong Community Reinvestment Act. CRA is working to create jobs, grow businesses, and build homes in communities across the United States. We are committed to ensuring that CRA stays strong and vital into the 21 st century.
Treasury will continue to work with our Office of Thrift Supervision and Office of the Comptroller of the Currency, and other banking regulators, to develop ways to stem abusive practices and encourage greater activity by responsible lenders. The Office of Thrift Supervision has issued an advance notice of proposed rulemaking with respect to abusive lending practices. The notice marked a critical step in responding to growing evidence that existing regulations may be inadequate to stem abuses. The notice is part of the Office of Thrift Supervision's three-part strategy to combat predatory lending, consisting of enforcement, education, and encouraging responsible lending in communities that are vulnerable to predatory practices.
Secretary Summers also announced last week the formation of the National Partners for Financial Empowerment, with participants from other government agencies, including HUD, as well as the financial services industry, and consumer and community organizations. These partners will help promote financial education, an important part of making sure that consumers can make informed decisions about borrowing and their financial future.
Today, Representative LaFalce and Senator Sarbanes are introducing legislation to address this growing problem. Their bill represents an important step in furthering President Clinton's initiative to increase consumer information and combat abusive lending practices. We believe that Congress should consider these issues this year, and we welcome the introduction of this important legislation.
Thank you, Mr. Secretary, and I look forward to our discussion this afternoon, and to working together with HUD to combat abusive lending practices.