FOR IMMEDIATE RELEASE
July 11, 2005
MAYOR MICHAEL R. BLOOMBERG SIGNS LEGISLATION PROTECTING HOMEOWNERS FROM PREDATORY LENDERS
Remarks by Mayor Bloomberg at a Public Hearing on Local Laws
"The next bill before me today is Introductory Number 307-A, sponsored by Council Members Dilan, Reed, Clarke, Fidler, Gerson, Koppell, Lopez, McMahon, Nelson, Quinn, Weprin, Gentile, Jackson, Liu, Recchia, James, Gennaro and Speaker Miller. Intro 307-A amends the home improvement contractor law by curbing predatory lending practices that can take place in financing of home improvement contracts.
"Intro 307-A prohibits home improvement contractors from engaging in any activities or receiving any fees in connection with the financing of home improvement work without clearly disclosing it to the consumer.
"The bill also prohibits home improvement contractors from acting as an agent, or from advertising, promoting or arranging for the services of any home improvement financing lenders. Additionally, home improvement contractors will be prohibited from receiving the proceeds of a home improvement loan directly from a lender. The bill instead requires the proceeds to be paid solely to the borrower or to a third party escrow agent before the disbursement of the funds to the contractor.
"These amendments are specifically designed to curb onerous predatory lending practices such as home improvement contractors who front for unscrupulous lenders. The lenders extend burdensome and excessively costly financing to low-income families, ostensibly for home improvements, but sometimes for other purposes like loan consolidation or education. The home improvements are often not completed properly, and consumers are left with debts they cannot repay, leading to foreclosures on their homes. The amendments in this bill will curb these predatory practices by barring home improvement contractors from acting as fronts for such schemes.
"I would like to thank the City Council and the Department of Consumer Affairs for their work on this bill."
Edward Skyler / Jordan Barowitz (212) 788-2958
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