Rhode Island last week became the 32nd state to enact a law addressing predatory lending practices.
At the State House signing ceremony on July 27, Gov. Donald L. Carcieri called the R.I. Home Loan Protection Act a “win-win” for consumers and lenders, saying it preserved access to credit for subprime borrowers while minimizing the dangers they face.
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“No family should be in danger of losing their home or the equity that they’ve worked hard to build up because of this awful practice,” he said. “We will not allow these abuses to continue.”
Carcieri said unfair lending practices cost Rhode Islanders $65 million a year. Families often are harmed, he said, when vulnerable individuals with little financial knowledge are led into high-cost loans with harsh, unnecessary terms..
Borrowers with“high cost home loans” – loans with rates and fees above a predetermined threshold – will automatically qualify for additional protection under the new law. The law also provides for easy access to counseling and education for such borrowers, and easy access to legal assistance for those who affected by predatory loan practices.
Those present at the signing included the measure’s General Assembly sponsors, Sen. Juan M. Pichardo and Rep. Joseph J. McCauley Jr., both of Providence; R.I. Attorney General Patrick J. Lynch; and representatives of advocacy groups ACORN, the AARP, R.I. Housing and the Center for Responsible Lending.
