wfn.org | [PCUSANEWS] Faith-based investors condemn predatory lending

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Note #8007 from PCUSA NEWS to PRESBYNEWS:

Faith-based investors condemn predatory lending
03486
November 13, 2003

Faith-based investors condemn predatory lending

Shareholders can stop abuses, PC(USA) official tells Congress

by Jerry L. Van Marter
and Daniel Rosan
Interfaith Center on Corporate Responsibility

WASHINGTON - A Presbyterian Church (USA) investment watchdog told the U.S.
Congress on Nov. 5 that shareholders in financial companies must oppose
predatory lending practices and insist that America's banks make capital
available to underprivileged communities.

	The Rev. William Somplatsky-Jarman testified before a joint hearing
of the Subcommittee on Financial Institutions and Consumer Credit and the
Subcommittee on Housing and Community Opportunity.

"Shareholders play an essential role in preventing abusive lending
practices," he said. "There may be short-term profit for a few from predatory
lending, but it pales in comparison to the harm it inflicts upon vulnerable
people and society."

	For the full text of Somplatsky-Jarman's testimony, visit
www.iccr.org/news/press_releases/Somplatsky%20testimony.PDF.

	Predatory lending is the practice of charging unreasonably high
interest rates in so-called "high risk" communities, manipulating loan
conditions to extract exorbitant fees, and forcing defaults in order to
foreclose on property.

	Somplatsky-Jarman, coordinator of the PC(USA)'s Mission
Responsibility Through Investment program, told the legislators: "We favor
long-term profitability through responsible lending. This is what builds
strong communities and shareholder value."

	The PC(USA) is a member of the Interfaith Center on Corporate
Responsibility (ICCR), and Somplatsky-Jarman is a member of the ICCR board.
The center represents 275 faith-based institutional investors with combined
portfolios worth about $100 billion.

This year the PC(USA) and its ICCR partners have engaged more than two dozen
financial institutions - including Citigroup, Lehman Brothers and Wells Fargo
Bank - on issues ranging from predatory lending to failure to comply with the
Community Reinvestment Act, which requires banks to invest capital in the
communities where they do business.

Somplatsky-Jarman was joined by John Lind, executive director of CANICCOR, a
non-profit research institution that is a national leader in identifying
predatory lending practices.

 "Not only those who make the loans, but those companies which service the
loans must be carefully screened," Lind said. "These servicers take monthly
payments and deal with any delinquencies and foreclosures. One such firm is
alleged to have recorded on-time payments as late, and initiated foreclosures
in order to collect additional fees."

For the full text of Lind's testimony, go to
www.iccr.org/news/press_releases/Lind%20Study.PDF.

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