Lending Law by Cox et al an Example for Nation Says NYT
March 9, 2009—In a March 7 editorial on the nationwide lending and foreclosure crisis, the New York Times suggested that Congress "consider emulating Minnesota's law at the federal level." At present, the editorial noted, "Minnesota's farsighted legislation applies only to state-chartered banks."
University of Minnesota Law School Associate Clinical Professor Prentiss Cox was the principal drafter of the 2007 legislation that was subsequently enacted by the Minnesota legislature. Among the law's measures to regulate residential mortgage lending are banning of negative amortization, collusion between brokers and lenders, and prepayment penalties on subprime mortgages. The law also imposes on brokers a fiduciary responsibility to the borrower.
The law was named one of the "Ten Best Public Policies of 2007" in a Huffington Post article by Andrea Batista Schlesinger, "for finally reining in the out-of-control lenders that prey on Americans' dreams of homeownership." Schlesinger is executive director of the Drum Major Institute, a nonpartisan, nonprofit think tank that researches important social and economic issues with an eye to changing policy.
Cox, a former assistant attorney general and manager of the Consumer Enforcement Division in the Minnesota Attorney General's Office, testified before the U.S. Senate Committee on Commerce, Science and Transportation in February, at a hearing on consumer protection and the credit crisis (http://www.law.umn.edu/news/cox-foreclosure-2-24-2009.html).
To see the complete New York Times editorial, go to here.
To see the Huffington Post best policies of 2007 list, go to here.