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City passes bill to protect low-income home owners

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The City Council overwhelmingly passed a bill last week prohibiting the city from doing business with banking institutions that engage directly or indirectly in predatory lending practices.

The bill, which gained approval with a vote of 44-5, is one of the toughest in the nations, and is aimed at stopping predatory lending, a practice which targets low-income home owners and saddles them with abusive mortgages, said Councilman James Sanders Jr. (D-Laurelton), the head of the economic committee.

The bill, which must be signed into law by Mayor Michael Bloomberg, bans the city from doing business with financial institutions that grant high-cost loans and engage in predatory practices, including giving loans without regard to the borrower’s ability to repay it or allow for prepayment penalties.

Low-income and minority communities have been particularly hard hit by predatory lenders, and the abusive practices have cost New York City’s homeowners tens of millions of dollars in unnecessary and unethical fees, Sanders said.

Posted 7:24 pm, October 10, 2011
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