Predatory lending study

A recent guest column from Speaker of the Maine House of Representatives Glenn Cummings and mortgage broker Kathy Crossman provided a valuable service by highlighting the growing problem of predatory lending. The speaker and Ms. Crossman are right to call for legislative action to protect the public from questionable business practices that strap too many Maine homeowners with unexpectedly high rates and fees, while leaving those consumers with little recourse.

Although most lenders in Maine are highly reputable, the actions of an increasing number of largely out-of-state companies are raising concerns and placing the homes of some unsuspecting customers at risk. Recognizing the problems posed by predatory lenders, Gov. Baldacci directed the Department of Professional and Financial Regulation to study this issue and recommend changes for the benefit of homeowners and future home buyers in our state.

Conducted by the Department’s Office of Consumer Credit Regulation, the study was released last month. A number of its recommendations, such as lowering the threshold at which loans are considered “high-rate, high-fee” and therefore qualify for additional consumer protections, will be considered by the Maine Legislature this year.

Given the leadership shown by Gov. Baldacci and Speaker Cummings to protect Maine consumers, predatory lending is likely to receive the attention it deserves in the months ahead. Maine homeowners and the vast majority of lenders – who operate responsibly and with openness – should be well-served by the scrutiny.

Anne Head

Department of Professional and Financial Regulation

William Lund

Office of Consumer Credit Regulation

Augusta