Predatory Lending and Preemption Legislation

Research funded by National State Attorneys General Program

Two companion reports examine the effect of the federal government’s preemption of state anti-predatory lending legislation for national banks in 2004.

Project Overview

Anti-predatory lending laws enacted by some states in the past decade to protect consumers from abusive and unfair mortgage practices saved many people from losing their homes during the foreclosure crisis. But their impact was undermined by the action of federal regulators who preempted state laws in 2004, exempting national banks from the tougher state laws. As a result of preemption, foreclosures and riskier lending increased significantly among the exempt lenders, center research shows.

Results from two companion center reports offer the first comprehensive look at loan quality and performance following the 2004 preemption by the Office of the Comptroller of the Current in states with and without strong anti-predatory lending laws.


The UNC Center for Community Capital conducts research and policy analysis on ways to make financial services work better for more people and communities.


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