Lenders and lawyers among those targeted by consumer legislation|
Georgia Online News Service
Second of two articles
Allison Wall, executive director of the Georgia Watch, often has a tough job battling for consumers issues at Georgia Capitol. But she's looking forward to a bill this year that gives some relief to homeowners, renters and municipalities, one that may help "clean up the mortgage broker industry here in Georgia."
Senate Bill 57 would throw a lifeline to homeowners mixed up in so-called foreclosure rescue scams. These are short-term, often predatory loans, made against a property deed. The law would treat these loans as mortgages, giving homeowners more rights to maintain possession of a home.
Renters get a little more protection from insolvent landlords in the bill. The bill would require 60 days' notice for renters of good standing to move out of a building in case of foreclosure. Current law provides only seven days.
The bill requires future sub-prime lenders to be "reasonable", extending only loans which could realistically be repaid considering a buyer's income, credit history, current debts, employment, and other factors. It also bans prepayment penalties.
"We're excited about this bill because it's got remedies for people today and it also provides reforms and remedies to help Georgia avoid this mortgage crisis situation in the future," Wall says.
She notes one revenue generator for municipalities: deeds acquired through foreclosure will have to be reported more promptly, allowing communities to have a clear map of blighted spots and the data to allow them to tap in to federal rehabilitation funds.
At least two more major consumer protection bills are expected to come up this session: one on marketing long-term annuities to seniors, another on greater disclosure for tax refund anticipation loans.
The anticipated annuities bill is patterned after laws in other states that ban inappropriate marketing of annuities to people who are statistically unlikely to live long enough to see the payoff. Similar laws in other states have resulted in hundreds of millions of dollars being returned to elderly clients.
The other bill would tone down advertising for so-called instant tax refunds, by requiring tax preparers to tell customers that many of them can actually get tax refunds in as little as10 days via electronic filing and direct deposit. Right now, these refunds are nothing but disguised high-interest, short-term loans, say critics. Some of these loans plus interest exceed the tax refund actually received, if any. Rep. Rob Teilhet (D-Smyrna) introduced similar legislation last year.
And a certain category of lawyers may get hit with disclosure legislation like their tax-preparing brethren. Lawyers who advertise on television must play themselves rather than hiring an actor if Senate Bill 41 becomes law. Furthermore, the attorneys must also clearly state that they're licensed to practice and must personally consult with any client hooked by the television ad. That bill, sponsored by Sen. Seth Harp (R-Midland), is now in committee.
Maggie Lee specializes in quality of life topics, Atlanta's international communities and general reporting. She covers Georgia economic development and the Chinese community as a stringer for China Daily and chronicles life in Georgia's most diverse county for the DeKalb Champion. [full bio]