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Native Intelligence
Council sold out public’s interest
(Published December 3, 2001)

By DIANA WINTHROP

Last December, the D.C. City Council unanimously approved the "Protections from Predatory Lending and Mortgage Foreclosure Improvements Act of 2000." That action was a culmination of years of work by a task force of mortgage bankers and lenders, title companies, Freddie Mac, Fannie Mae and consumer groups.

It was an effort that was initiated by the city’s banking and financial regulators, who believed that consumers and lenders would be better served by some revisions in the District’s mortgage foreclosure law that had been on the books since 1901. It also would add some protections for consumers because of the growing predatory lending business operating in the District.

The city’s current banking commissioner, S. Kathryn Allen, said a revision was "critical to make sure citizens have due process and understand the law before they may lose their home."

This was not a quick fix. It took almost three years of working sessions to write the legislation that was believed, when approved, to be clear and fair to everyone. The council unanimously gave it their stamp of approval. The financial control board reviewed and OK’d the bill. The then-Republican controlled Congress also gave its stamp of approval, and then the bill became law.

Enter John Ray, former member of the D.C. council and currently a partner at the powerful law firm of Manatt, Phelps and Phillips (Charles Manatt is a former chairman of the national Democratic Party). The firm was receiving a ton of money to represent SunTrust, First Union and Chevy Chase banks. They sent Ray, who served on the council from 1979 to 1996, back to his old stomping grounds to do the dirty deed and undo three years of work.

Of course, sending a former council member like John Ray is better than sending a run-of-the-mill lawyer-lobbyist – especially when Ray’s former council staffer, current Ward 6 Councilwoman Sharon Ambrose, is now chairman of the Consumer and regulatory Affairs Committee. It didn’t take Ambrose or Ray very long. Last month, the city council voted 12-1 to suspend the law for four months.

Adrian Fenty, the newest and youngest member of the council, was the lone lawmaker to reject Ambrose’s effort to block the new law. Fenty, who represents Ward 4, said he suspects that a number of his colleagues wish now that they had voted differently and not backed Ambrose. He said he found it "unusual" that the same people who unanimously voted for the measure last year reversed themselves.

Banking Commissioner Allen said she "was disappointed that 12 members had not been given enough information about options available. It is not a good thing having a level of uncertainty around the law for four months. It is detrimental for the lending community and consumers."

Allen’s agency licenses close to 700 mortgage lenders and brokers to do business in the District. John Ray twisted council members’ arms for three of the big ones.

In a closed-door meeting, Mayor Anthony A. Williams reportedly admonished council members. Sources said the mayor criticized the council’s reversal as a bad precedent. Some council critics say this one act sent a message that the council is for sale for a song and all you need do is hire a six-figure lobbyist to influence them.

Some of the mayor’s critics have complained that Williams could have blocked the suspension of the new law by vetoing the measure, rather than allowing the suspension to go into effect. But Williams, in a sharply worded letter to the council, said he is not happy and quickly organized a task force to "develop legislation and remedies to the current law."

But once the council blinked, it was really all over.

The big banks bought the leverage they needed to influence the law. The downtown lawyers now know how easy it is to stop a bill, when just a little pressure is applied.

We pay city council members $92,520 annually to do "the people’s business." Except for freshman Adrian Fenty, we’ve been robbed.

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The writer, a native Washingtonian with more than 25 years in the news business, spends her nights toiling as an editorial producer for a network morning news show. Contact her at diana@thecommondenominator.com with your news tips.

Copyright 2001, The Common Denominator