| New Jersey’s Predatory Law Gets Pre-empted By OTS
Federal Agency Says Some Provisions of Law Can’t Apply to Federal Savings Associations July 25, 2003 By MortgageDaily.com staff |
| Predatory lending laws set to go into effect this fall in New Jersey have lost some of their effectiveness, thanks to a ruling by the Office of Thrift Supervision (OTS).
The OTS ruled that certain parts of a new New Jersey law aimed at stopping predatory lending practices are pre-empted by the federal Home Owner’s Loan Act, which authorizes the OTS to “provide for the organization, incorporation, examination, operation, and regulation of thrift institutions, giving primary consideration of the best practices of thrift institutions in the United States. Specifically, the OTS ruling challenged New Jersey’s ability to regulate a federal savings association’s “terms of credit, loan-related fees, disclosures, mortgage processing, origination, refinancing, servicing, and disbursements.” Also, the OTS said that a “multi-faceted compliance scheme” in the law cannot apply to the associations either. According to a statement released by the OTS, similar New York and Georgia statutes have been pre-empted on the same grounds. |
