What is stipulated by state anti-predatory lending laws?


State anti-predatory lending laws happen to be much more restrictive and effective in curbing predatory lending than federal laws. However, state laws are overridden by federal laws lobbied for by certain lender groups.

On the whole, due to the increasing growth of the subprime market, predatory lending has also increased proportionally. To respond to the growing number of loan abuse cases, most states have passed new laws, or amendments to existing laws to encompass the need for regulation of subprime lenders.

In fact, state anti-predatory lending laws do influence the subprime market and dissecting the existing legislation in details helps achieve better and fuller understanding of how the subprime market functions and how it should be regulated in order to protect consumers.

The Mini-HOEPA State Anti-Predatory Lending Laws

Of the well known TILA, RESPA and HOEPA only HOEPA does in fact regulate high-cost loans and is effective anti-predatory lending legislation. Due to increased number of mortgage abuse, many states have passed legislation based on HOEPA and those are called mini-HOEPA laws. States also have other existing anti-predatory lending laws enacted and functioning before, in conjunction with or separately from mini-HOEPA laws.

Lenders argue that state anti-predatory lending laws in fact are detrimental to the market and low-income borrowers, while others find anti-predatory laws a necessity to fight predatory lending and protect borrowers.

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