The New Jersey Anti-Predatory Lending Act is specifically designed to prevent predatory lending practices and protect vulnerable borrowers from exploitation. This legislation addresses issues such as high-interest rates, hidden fees, and other deceptive practices that can lead borrowers, particularly those from low-income or distressed backgrounds, into financial traps. The Act establishes guidelines that lenders must follow to ensure that loans are fair and transparent, which ultimately helps safeguard consumers against abusive lending behaviors. By focusing on protecting these vulnerable borrowers, the Act plays a critical role in promoting responsible lending practices within the state.
In contrast, increasing loan availability for all borrowers may not inherently align with consumer protection, as it could compromise loan quality. Providing guidance for mortgage lenders is a useful function but not the primary purpose of this specific Act. Moreover, while promoting competition among lenders can have positive effects on the market, the core intent of the Anti-Predatory Lending Act is to curb harmful practices, ensuring ethical treatment of borrowers rather than just fostering competition.