New agenda for consumers in the Senate

Published 9:00 pm Friday, May 25, 2001

Associated Press

WASHINGTON — Just hours after Republican Sen. James Jeffords’ announced his party defection, the Senate Banking Committee’s senior Democrat indicated he would like the panel to focus on a number of consumer-oriented issues.

Sen. Paul Sarbanes of Maryland ticked off as priorities investor protection, extending consumer protections to cover more high-cost mortgage refinancings and home equity and repair loans, and financial privacy safeguards.

He is the leading candidate to become chairman of the committee with Democrats taking control of the Senate.

Sarbane told reporters at a press conference that home lending which abuses consumers with excessive interest rates and fees is "crying out for a remedy."

Sarbanes and LaFalce last year proposed legislation that would extend consumer protections under current law to cover more high-cost mortgage refinancings, home equity loans and home repair loans. Under current law, such high-cost loans are not prohibited, but lenders are subject to special restrictions and disclosure requirements.

Their bill so far has gone nowhere, but with the power shift in the Senate brought by Jeffords’ switch, the two lawmakers were hopeful. The House remains firmly under Republican control, however.

Under current chairman Sen. Phil Gramm, R-Texas, the Banking Committee had focused on legislation pushed by Wall Street to reduce fees paid by companies to register stocks, and had planned a review of federal securities laws with a view to loosening restrictions on the industry.

The power shift in the committee came in a Senate that earlier this year passed two major business-backed measures: one making it harder for people to erase their debts in bankruptcy court and another repealing Clinton administration workplace rules aimed at curbing repetitive motion injuries.

President Bush signed the ergonomics legislation into law, but the bankruptcy measure has been stalled for months in Congress.

At his news conference, Sarbanes said he wanted the Banking Committee to pay more attention to urban issues such as affordable housing and transit. Other subjects he plans to address: aggressive credit-card marketing, household debt, financial education and literacy, and fighting money laundering.

Republican lawmakers had no immediate comment on the new agenda.

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