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Maine’s anti-predatory-lending bill targets high-cost loans

Critics say states creating patchwork quilt of regulations

In the latest example of state lawmakers beating Congress and federal regulators to the punch, Maine has adopted a strong anti-predatory-lending measure that an advocate for mortgage brokers says will have the effect of "wiping out subprime lending in the state." Legislation passed unanimously by state lawmakers and signed into law Monday by Gov. John Baldacci broadens the definition of high-cost mortgage loans, places new restrictions on their use, and allows for criminal prosecution of violators. Maine accounts for only a small percentage of subprime lending nationwide. But opponents argued that the bill would contribute to the patchwork nature of state and federal laws governing mortgage lenders. Maine's Homeowner Protection Act won't apply equally to all lenders, as federal regulators maintain that states are preempted from supervising federally chartered banks and savings and loans. That's a view that's been upheld by courts. But states still have regulatory authori...