Senate Banking Committee Chairman and Presidential hopeful Christopher Dodd (D-CT) took part in a 50-person townhall meeting in Des Moines Iowa yesterday. Dodd praised the Save the American Dream campaign’s goals and called for a crackdown on predatory lenders and an agressive plan to keep homeowners in their homes.

The panel was led by Iowa Citizens for Community Improvement leader and NTIC board member Brenda LaBlanc, Inez Killingsworth of Empowering and Strengthening Ohio’s People and also on the board of NTIC, and Iowa State Senator Jack Hatch. The event was organized by Iowa CCI, a member of the Save the American Dream Campaign and an affiliate of NTIC.

DODD URGE TOUGH STANCE AGAINST PREDATORY LENDING
By Fred Love
Register Correspondent
Des Moines Register

October 7, 2007

Democratic presidential candidate Christopher Dodd said Saturday he would back tough criminal penalties for brokers who engage in predatory lending practices.

Dodd, a U.S. senator from Connecticut, took part in a seven-person panel discussion on predatory lending at the Iowa Citizens for Community Improvement building in Des Moines.

He advocated hefty fines or even jail time for lenders who exploit homeowners through adjustable interest rates, high-cost loans and inflated appraisals.

He cited statistics showing Iowa has the ninth-highest home foreclosure rate in the nation, and he condemned predatory practices as disproportionately targeting lower-income homeowners.

“It’s long overdue that the American economy starts working for everybody,” he told an audience of about 40 people.

Three Des Moines-area residents said they were victims of predatory lenders.

Sally Riggs, 40, said the financial burden contributed to the breakup of her marriage and eventually drove her former husband to suicide five years ago. “The stresses of the predatory loan were the final straw for him,” Riggs said.

She said a lender approached her, offering to consolidate all her family’s bills and lower their payments.

Riggs said they took out a loan and ended up with a monthly payment of about $943, twice the amount they had been paying.

LuQuita Franklin, 30, said she thought she was signing up for a 7 percent fixed-interest-rate loan to buy a home in August 2006. Franklin said the loan actually had an adjustable rate that could force her to pay nearly 14 percent interest.

Brad Strasser, 45, said he and his family had to move out of their house and into an apartment to keep up with payments on an adjustable-rate loan he signed in 2005. “I work two full-time jobs just to try to make ends meet,” he said.

Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, said lenders need to stop steering homeowners toward high-risk loans if they qualify for fixed-interest loans.

He said he would back a bill in the Senate to require more regulation of lending companies if the Federal Reserve doesn’t propose similar standards soon.

Dodd said that if he were president, he would work closely with the Federal Reserve and other government entities to curtail predatory lending.

“I’ll have people who will be thinking about this and working on these issues every, single day,” he said.

Also, Dodd called for the creation of personal tax-deferred homeownership accounts that would help prospective home buyers save for a down payment.

The government would match up to $500 per year for low- and middle- income people who open such accounts, he said.