Donald Riegle: “Many have objected to the stigma attached to the loans covered by the legislation. In response to those concerns, this…”

“Many have objected to the stigma attached to the loans covered by the legislation. In response to those concerns, this amendment revises the entire subtitle to eliminate the term 'high cost mortgage.' Likewise, some Senators have expressed concerns that the prohibitions in the bill reported by the committee were overly broad and would capture credit transactions that were not unfair. Our amendment tailors these prohibitions to focus on the truly problematic issues. Rather than prohibiting balloon payment loans, for instance, the amendment prohibits balloons only on short term loans--those less than 5 years in length--that most often trap unwitting borrowers. These changes, combined with the regulatory authority provided to the Federal Reserve to waive the prohibitions on mortgages that are in the interest of the borrower, should ensure that this legislation productively addresses the problem of reverse redlining without restricting traditional credit flows. The provisions of this amendment, which are supported by both me and by Senator D'Amato, will improve the Home Ownership and Equity Protection Act.”