Illinois lawmakers and the governor seem to be tripping over each other to institute measures to curb so-called predatory lending.
An increasingly volatile issue nationwide, predatory lending
has been difficult for critics to define as they attempt to dampen its effect–but, generally, it includes mortgage lending practices that harm borrowers by charging onerous interest rates, lending people more than they can repay and tacking on unnecessary fees.
Gov. George Ryan recently proposed rules to ban predatory lending, and a public hearing on the subject will be held at 2 p.m. Feb. 1 at the James R. Thompson Center, 100 W. Randolph St., in the concourse level auditorium.
State Rep. Daniel Burke (D-Chicago) announced last week that he has resuscitated legislation to combat predatory lending.
He was joined at a news conference by well-known community activist Gale Cincotta, now executive director of the National Training and Information Center in Chicago.
“We didn’t win the legislation last year, but we sure as heck are going to win it this year,” Cincotta said.
According to NTIC, Chicago foreclosures started by subprime lenders–which make loans to people with spotty credit histories and sometimes are targeted as predatory lenders–have increased from 131 in 1993 to 4,958 in 1999.
Burke’s release said his district “has been decimated by foreclosures, totaling more than 800 foreclosure actions in 1999 in the 60629 ZIP code area.”
Among other things, his legislation would cap lender mortgage points and fees to 3 percent of the total loan amount.
Burke said he believes that the “force of law” would be more effective over the long term than Ryan’s administrative guidelines would be.
“Regulations are easily revised and reversed,” Burke said.
Bank Notes: Harris Bank, a unit of Bank of Montreal, reported net income of $94.5 million in the fourth quarter, up 64 percent from $57.8 million a year earlier. For the year, it earned $304.8 million, up 35 percent from $226.5 million in 1999. Without a $47 million pretax gain on the sale of the corporate trust business and related charges, and a $60.2 million pretax gain from the sale of the merchant card business, fourth-quarter net income was $62.0 million, an increase of 7 percent from the prior year, and annual net income was $243.4 million, also up 7 percent. Assets grew to $29.0 billion from $27.2 billion during 2000. Return on average assets for the year was 1.08 percent; return on average equity was 18.5 percent.
– Former Bank One Corp. executive Thomas Hoaglin was named chief executive of Huntington Bancshares Inc. in Columbus, Ohio. Hoaglin, 51, held numerous positions at Bank One, including heading its Ohio operations and serving as executive vice president of private banking, before leaving the Chicago-based bank in 1999. He became vice chairman of AmSouth Bancorp. in Birmingham, Ala., in February 2000.
– Cole Taylor Bank appointed Mark Garrigus, 50, its chief credit officer. Garrigus, a former senior vice president of the old First Chicago Corp., most recently was chief credit officer at Orix USA, a financial services company owned by Orix in Japan.
