Maine Legislature Passes Model Anti-Predatory Lending Bill
The news has been filled recently with stories about people having trouble paying their mortgages.
This is because some lenders use unfair lending practices - known as "predatory" lending. The Maine
Legislature passed a new law that stops predatory lending in Maine. Coastal Enterprises Inc.
and over 30 other organizations, including Maine Equal Justice Partners and MAIN, supported the new law.
The new law had strong leadership from House Speaker Glenn Cummings (D) and State Senator Dana
Dow (R). It had unanimous support in both the House and the Senate. The law has these requirements:
- Lenders must figure out if a borrower can repay the subprime loans. They must also get proof of a
borrower's income in making these loans. This will help make sure that the borrower is not getting
a loan beyond the borrower’s means.
- Mortgage brokers must act in "good faith and with fair dealing" in any transaction or course
of business in making a mortgage loan. They must recommend mortgages that make sense for the borrower.
- Borrowers who refinance must get something out of the deal. This will help to stop lenders
from buying and reselling loans just to get fees.
- The State’s Office of Consumer Credit Regulation as well as the Attorney General's office can
prosecute lenders and mortgage brokers who violate this new law.
- Borrowers also have the right to sue creditors who break this new law.
If you have any questions about how this new law might affect you, you can call the
Bureau of Consumer Credit
Protection at 1-800-332-8529.
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