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Could it be the beginning of the end of subprime lending?

At the beginning of the last week in June The Money Store, the nation's most notorious subprime mortgage lender, shut down and the end of the week saw groups gear up for National Shark Hunting Day.

While prospects for legislation in Congress to stop the proliferation of high-interest-rate, high-fee lending that fails to benefit borrowers appear dim in the near term, grassroots groups announced at the NPA conference a plan to take action against loan shark lenders. Groups want local solutions modeled in part on a proposed Chicago city ordinance and other local approaches. Many groups also demanded a moratorium on foreclosures from the most prolific subprime lenders in their city.

Subprime lending, which grew as part of the boom economy of the last five years, is hurting now in part because the country is waking up and realizing the only way these companies make profits is by ripping off unsuspecting homeowners. Much of the industry is devoted to loans on which points and fees are so expensive they drive borrowers into foreclosure, harming not only individuals but also entire neighborhoods. In many cases these are the same communities that historically suffered from redlining or lack of access to conventional credit.

"We know that you can protest but we got a call that some people in shark suits were approaching the building," a police officer told leaders of Louisiana Communities United. The group was actually just carrying signs, before going into the offices of UC Lending to issue a series of demands.

In Cleveland, about 55 people attended a public meeting that resulted in going to the Associates and then the home of Andy Randall, VP and Chairman for Firstar Bank, Northern Ohio Region. The demand for Associates was twofold: stop stonewalling the group and tell them who is in charge and tell that person to meet with us. As for Randall, the group expected to get not one but several phone calls over the next few days. They went to his door and found he wasn't home but that his bubbly 18-year-old daughter was. She was hysterical! "I am sorry he is not here right now." Then with a straight face and in all seriousness as she looked at 'Larry the Loanshark' and asked, "Was he expecting you tonight?"

"Lenders beware," one article in a San Antonio newspaper started. "You're being watched." T.C. Calvert of that city's Neighborhoods First Alliance told the paper, "These people have to be stopped. We're just getting our group started but we've already heard from people with problems."

Meanwhile, Central Illinois Organizing Project brought more than 30 protesters, many of them ministers, to The Associates in Springfield, Illinois, which yielded the following comment from a loan officer there: "You're really pissing me off!" The group is already planning their next action.

In Des Moines, a news conference was already over when the action began with a woman who approached the group with news her home was being sold at the end of the day and a desperate plea for help. So the leaders of Citizens for Community Improvement did what they do best: organized an action on the bank. A few hours later, they were in the office of the bank president, who agreed to hold off on the foreclosure.

"I think this is the beginning of the end of predatory lending-not just in Chicago but for the country!" Cincotta said. "It's about time. Predatory lenders are no better than loan sharks." Cincotta led Chicago groups into action, as they focused on passing a Chicago city ordinance and hit local BankAmerica headquarters to demand an end to bank opposition to the proposal.

The ordinance requires top officials at banks that hold municipal deposits to pledge that "neither [the bank] nor any of its affiliates is or will become a predatory lender within the city of Chicago." Institutions whose top financial officers failed to sign the pledge would be unable to hold city deposits.

A protracted battle between lenders and community groups over the city ordinance has centered around the definition of a predatory subprime mortgage loan. The definitions expected to be in the final version are as follows: any loan whose annual percentage rate is 6 percent more than the T-bill rate (a common benchmark used in federal and other state fair lending laws which as of June 22 was at 5.98 percent)-in today's numbers, any loan originated at more than 11.98 percent interest.

Another way to define a predatory loan under the ordinance would be the percentage the lender charged in fees. Predatory loans under the ordinance would be those on which the lender charged more than 5 percent of a loan's principal in fees-such as fees paid to brokers, for example.

Thirdly, the ordinance would ban certain predatory practices such as restricting monthly payments on a subprime loan to no more than 50 percent of a borrower's total monthly bills and some restrictions on loan prepayment and so-called balloon loans which require a large payment just a few years after loan origination.

In a short period of time we have proven that by staying together we can make the officials from different institutions who have the power to make decisions and to make the changes that our community requires listen to our needs. But this is just the beginning of a long road and we will get to the winning line only if we stay TOGETHER, participating in planning and carrying out strategies. Let's work together and stay united. That is the only way our community can achieve its goals.