He said he is optimistic that the bill could include a ban on mandatory arbitration. "I think the industry has come a long way on this issue."
Countrywide Financial Corp., one of the nation's largest mortgage banks, this month did away with mandatory arbitration on its subprime loans.
Mark Pearce, president of the Center for Responsible Lending, a borrower-rights group, said one of his main concerns will be to ensure that any federal law recognizes borrower protections in place at the state level. He said he is worried that a federal law could weaken existing protections in many states.
"The states have shown that it's possible to pass a strong law that still protects a vibrant, responsible subprime market," Pearce said. "When we look at federal legislation, one big question is, would anything at the federal level undo what the states have done, because the states have been the leaders on this issue."
While debate between the lending industry and consumer advocates will be intense, industry lobbyists yesterday said the odds are good that the Republican-led House will produce a bill that could be passed, especially given the Republicans' success at changing the federal bankruptcy law to make it more difficult for consumers to erase debts.
Steve O'Connor, vice president of government affairs at the Mortgage Bankers Association, called the bipartisan effort by Ney and Kanjorski "a good starting point."
"There's clearly an urgent need for a national standard," he said. "This will be an excellent first step to have two esteemed members of the House Financial Services Committee working together."
Staff writer Sandra Fleishman contributed to this report.