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League CEO testifies before N.Y. state committee
LATHAM, N.Y. (5/16/08)--The president/CEO of the New York State Credit Union League testified before a state committee to voice support for and concerns about a bill proposed by the state in response to the mortgage and subprime lending crisis. William J. Mellin, league president/CEO, appeared before the New York State Standing Committee on Banks on behalf of New York’s credit unions to voice his support of the Governor’s Program Bill #44 (S.8143/A.10817).
William J. Mellin, president/CEO of the New York State Credit Union League, addresses the state Standing Committee on Banks at a public hearing in Albany Monday to evaluate the governor's program bill to address mortgage foreclosures and subprime loans in the state. (Photo provided by the New York State Credit Union League)
The bill, introduced in response to the mortgage foreclosure crisis and subprime lending practices in the state, primarily seeks to expand protections currently afforded to high-cost mortgages to a new category of non-conventional mortgages; strengthen and expand New York’s Anti-Predatory Lending law; and amend the penal law to include crimes relating to mortgage fraud. Throughout his testimony, Mellin expressed credit unions’ support of all aspects of the legislation except for a low interest-rate-threshold component. “While we agree that the existing thresholds are perhaps too high for the industry, we are concerned that the thresholds proposed in this bill are too low,” said Mellin. “If thresholds are to remain a key component of the legislation, I ask that you consider the unique not-for-profit, member-owned, ‘people helping people’ philosophy of credit unions and exempt them from a stated threshold.” Mellin laid out credit unions’ history of responsible lending to the committee chaired by Sen. Hugh Farley (R-Adirondack/Capital). He shared basic credit union underwriting practices where both borrowers and lenders have a mutual interest in each other’s success, and how the proposed threshold might negatively impact a credit union’s ability to make loans to its membership. Also, Mellin pointed out how the threshold would not only apply to the economically disadvantaged, but also affect a class of borrowers that historically have not been in need of increased legislative or regulatory protections. “Credit unions do not engage in predatory practices,” stated Mellin. “Credit unions were originally formed to help many New Yorkers achieve the ‘American Dream’ when other lenders would not (help), and this current crisis again demonstrates the need for credit unions.” Mellin encouraged the committee to focus more on underwriting principles and to consider credit unions as a viable solution to today’s subprime mortgage crisis.


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