OHIO'S House and Senate need to resolve their differences over the badly needed predatory lending bill and pass a measure to benefit consumers as quickly as possible. The state already leads the nation in foreclosures, and cannot afford to delay clamping down on unfair lending practices.
The state has passed similar bills in the past. But those measures didn't effectively deal with the problem, which is why some local governments have passed tougher measures on their own. Ohio needs a predatory lending law that covers the entire state and all Ohioans.
Senate Bill 185 came close back in March, but the Senate didn't like the House's rewritten version. Now, legislators are coming to terms on the measure, though differences remain.
Ohio lawmakers must get a law on the books that will be in the best interest of consumers, but without sending lenders fleeing from the state.
The problem is that consumers who have poor credit or no down payment usually qualify for sub-prime loans that have high interest rates, and sometimes no interest at all. Mortgage brokers and lenders - banks are not included since they are regulated by federal standards - act in their own financial interests, not in the consumer's best interest. Then, when mortgage payments go up, some homeowners can't keep up and lose their homes.
So as lawmakers haggle over the issue, unsuspecting and trusting consumers continue to put their trust in lenders who are happy to take them for all they can. Fortunately, both legislative chambers agree that real estate appraisers need to be licensed, that brokers shouldn't own or be in cahoots with appraisal firms, and that the state and county should be allowed to investigate agreements gone sour.
Both versions of the bill offer beneficial provisions. The Senate's would greatly help consumers in that it would require brokers and lenders to act in consumers' best interests and place the mortgage loan industry under the Consumer Sales Practices Act.
The House would define predatory lending and allow victims to sue for an unspecified amount of damages.
What matters most at this point is that predatory lending legislation with the muscle to fix a serious problem finally wins approval in the General Assembly.