It’s unfortunate that the debate over a new law designed to curb predatory lending in Illinois has turned ugly. At a press conference announcing the legislation a few weeks ago, it was difficult to hear speakers over the shouts of protestors, and at yesterday’s hearing on the measure, James Capraro, executive director of the Greater Southwest Development Corporation, was escorted out of the meeting, according to a story in today’s Chicago Tribune, after a shouting match with Rev. Al Sampson, who opposes it.
The law requires home buyers and homeowners who are refinancing in 10 ZIP codes to go through financial counseling if they have poor credit. State officials and organizations that lobbied for the law seem to have good intentions. Predatory lending is a serious problem in this state, and financial counseling can’t hurt. Sure, there’s some logic to choosing the ZIPS with high rates of predatory lending and foreclosures, but when you consider that residents in these ZIPs tend to be African-American or Latino and that white borrowers with poor credit in nearby neighborhoods don’t have the same burden, the four-year pilot program starts to look ill-conceived at best.
Rather than a law that places the burden for avoiding sharks on the victims, how about a law that eliminates the sharks?