Lawsuit Seeks to Block L.A. Lending Law
A group representing an array of lending companies filed a lawsuit Friday seeking to block enforcement of Los Angeles’ new predatory-lending ordinance.
In the suit filed late Friday in Superior Court in Los Angeles, the American Financial Services Assn. alleged that the ordinance is preempted by state and federal laws regulating mortgage lending and financial institutions. The suit seeks a permanent injunction barring the city from enforcing the ordinance.
The City Council in November gave preliminary approval to the ordinance, which addresses high-interest mortgage refinancing loans made to borrowers with spotty credit histories or none at all. Backers said the ordinance was needed to protect Los Angeles homeowners from unscrupulous lenders, who often target older people, poor people and non-English speakers.
A final version of the ordinance is still being crafted.
City officials hadn’t seen the suit Friday and couldn’t comment on its specifics. A spokeswoman for Mayor James K. Hahn said, “The mayor continues to stand behind the ordinance.”
The Washington-based AFSA represents more than 350 credit card issuers, consumer finance companies and auto finance firms.
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