HARRISBURG, Pa. - Four months after he announced tough steps toaddress predatory lending in Pennsylvania and joined with Gov. EdRendell in supporting legislation that was intended to legalize thepractice in the state while enforcing restrictions on loan amountsand providing consumer protections, Pennsylvania Banking SecretaryBill Schenck and the governor withdrew their support for thelegislation after elected officials voted down the idea of trackingpayday loans through a state database. In response, Schenck andGov. Rendell have urged more credit unions to get involved withmaking short-term loans. "The more competition, the better," saysSchenck. "The more providers there are, the lower the cost willbe." Rep. W. Curtis Thomas (D-Philadelphia) who opposed theoriginal payday bill, said the legislature must find other ways tobring traditional institutions into the marketplace. "Where weshould be focusing our attention is expanding the community creditunion law and giving people a safe market to borrow," said Thomas.In March, Schenck announced his intention to get tough on enforcingconsumer protection legislation. As part of his plan, he set up anew Investigations Division to expand the agency's historic role ofjust being an examiner of credit unions and banks, to also includean enforcement role. In addition, he wanted to set up a databasewith other states of people who had been found guilty of practicingabusive lending services so agencies in various states could shareinformation on the perpetrators. At the time, Schenck said he hadthe full support of Gov. Rendell on the Investigations Division.That same month, Schenck released the findings of a statewideforeclosure report he presented to the Pennsylvania GeneralAssembly - "Losing the American Dream" - that the Department ofBanking was directed to conduct by House Resolution 234 which foundthat on a statewide basis, foreclosures in Pennsylvania had"skyrocketed." After releasing the study result, Schenck announcedhis intention to press for new laws and regulations aimed atlessening the surge in home foreclosures in the state, many ofwhich he said were found to result from unscrupulous lendingpractices and subprime lending. -

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