Responsible Lending Act

The Responsible Lending Act (H.R. 1295) was designed to create uniform national standards for the mortgage industry to protect consumers from predatory lending practices. The bill would have established stricter regulations for "higher-cost mortgages," including requirements for written property appraisals, the creation of escrow accounts for taxes and insurance, and limitations on prepayment penalties and late fees.

For everyday citizens, the bill aimed to increase transparency and support during the home-buying process by creating a new Office of Housing Counseling within HUD to provide education and certified counseling services. Additionally, it sought to improve accountability by establishing a national database for mortgage brokers and implementing federal requirements for broker licensing to ensure consistent consumer protections across all states.