The Montgomery County Council is considering toughening laws against predatory lending after a study found that African Americans and Latinos are far more likely than whites to be charged excessive fees or given loans that they cannot afford.

"This is often discrimination with a smile," said council member Tom Perez (D-Silver Spring), who co-sponsored legislation with council member Michael L. Subin (D-At Large). "So many consumers are victims of predatory lending and don't even know it."

The legislation would strengthen county laws against predatory lending schemes and give Montgomery "the strongest anti-discriminatory, anti-predatory law in the country," said Sara Pratt, a former director of fair housing enforcement at the Department of Housing and Urban Development.

The study, released yesterday, found that African Americans in Montgomery were more than five times as likely to have "subprime" loans than are white residents with comparable incomes. Subprime loans generally have higher interest rates because those taking out the loans are considered to be liabilities as a result of bad credit or other reasons.

The study found that Latinos were three times as likely to have subprime loans than are white residents with comparable incomes.

Calvin Bradford, a consultant who worked on the study, said even the wealthiest African Americans in the county are far more likely than whites to have subprime loans.

"There are many responsible subprime lenders," Perez said. "But there are all too many unscrupulous subprime lenders preying on people seeking the American dream."

Montgomery's law forbids loan companies to charge excessive fees or structure loans so that low-income borrowers must refinance multiple times.

The bill introduced yesterday would do away with a $5,000 cap on fines levied against predatory lenders. The county's Human Rights Commission also would be empowered to investigate individuals accused of unscrupulous lending practices.

Under the existing law, only institutions can be fined for predatory lending.

Pratt, whom Perez consulted in drafting the bill, said federal law prohibits many of the practices targeted by the Montgomery bill. But she said that the federal law often is not enforced in local cases and that many jurisdictions "simply do not have predatory lending laws."

Maryland, which has a law against predatory lending, prohibits a jurisdiction from passing such legislation unless it "pertains to fair housing laws," Perez said. The Montgomery bill amends the county's housing code and so obeys state law, Perez said.

Perez and Subin said combating predatory lending will make more affordable housing available, because loans would be less costly and foreclosures less likely.

Affordable housing "is not just an issue of the price of land and the price of housing," Subin said. "It is an issue also of the [loan] costs afterward, and that burden has fallen disproportionately on the African American and Latino communities."