It was called "reverse redlining" back in 1998. Poor blacks and Latinos in Ohio were being steered into loans packed with unnecessary fees and high interest rates. Many borrowers would inevitably default.

And slowly but surely, along came news of an alarming rise in Ohio's foreclosure rates (from around 16,000 in 1995 to almost 26,000 in 1998, a 60 percent increase). Lisa Rice, of Toledo's Fair Housing Center, and other consumer advocacy colleagues approached state legislators with pleas for help. They were turned away, Rice says, with requests for even more data.

Meanwhile, filings made exponential jumps: 31,000 in 1999, 35,000 in 2000, 43,000 by 2001.

To consumer advocates like Rice, the only conclusion was that many of the foreclosures were a result of predatory lending. Ohio's consumer protection laws, which did nothing to fend off unscrupulous mortgage brokers and lenders, needed to change, they told elected officials. But Rice says they were told repeatedly that the real problems were the sagging economy and unwary borrowers.

This lack of understanding on the part of state politicians has made Ohio a leader in foreclosures, which reached 80,000 last year. Even Congress has done little to address the problem. That is, a systematic effort by certain subprime lenders to target poor, minority homeowners most in need of a loan, and sell them mortgages that return handsome profits in the form of upfront and pre-payment penalty fees and exorbitant interest rates.

As a result, daily headlines now chronicle the subprime market's nosedive, with the US housing market along for the ride. The most dire predictions are that a recovery is at least five years away, and that financial losses could total $100 billion.

While Ohio legislators finally joined the rest of the states and passed meaningful mortgage lending reform last year, serious questions remain unanswered. To that end, there's been a flurry of activity in the chambers of the US House and Senate. Committees finally want to know: How can homeowners facing foreclosure be helped? Where were the banking and credit regulatory agencies at the height of the subprime boom? What other tricks might mortgage lenders use, and how can future federal legislation stop them?

AS RICE returned to her desk in 1998 to compile more data for state politicians, lending industry lobbyists prepared for battle.

Between 1999 and 2000, banks alone contributed almost $400,000 to reelection campaigns in the Ohio House and Senate (most of it went to Republicans, with Democrats getting about $50,000), according to campaign finance records compiled by government watchdog Ohio Citizen Action.

Calls for action by those like Rice fell on deaf ears in Columbus. Cities, including Cleveland, ravaged by foreclosures that were leaving communities desolate and people homeless, threatened to pass local anti-predatory lending ordinances, laws that would prohibit onerous interest rates and mandate counseling for borrowers about to sign high-cost loans, if the Ohio General Assembly failed to act.

But the lending industry was ready. When cities dropped the gauntlet, Rep. Chuck Blasdel (R-District 1) was there to pick it up. Blasdel promptly introduced HB 386, a law that mimicked weak federal consumer protection standards and preempted cities' home-rule authority over lending activities. The bill also created a predatory lending study committee, to which Blasdel appointed himself chair.

(During his tenure in Ohio politics, Blasdel, who was term-limited out in 2006, received more than $60,000 from groups identified as banks, mortgage lenders and brokers, and credit unions. Over half that amount, about $34,000, came in 2001 and 2002, the years HB 386 was on the House and Senate floors. "Blasdel, more than anyone else, delayed predatory lending reform in Ohio for years," says Bill Faith, the executive director of Coalition on Homelessness and Housing in Ohio, an advocacy group.)

Then the bill was fast-tracked - it passed the Ohio House 16 days after introduction. It then cleared the Senate in three months, and was law by February 2002.

While a few Democrats voted against HB 386, COHHIO's Bill Faith says bipartisan neglect was also part of the problem. "We had people who defended the industry for a long time," he says. Banks offered claims of jobs in home districts and aid to a flailing state economy, and many state politicians were eager to accept.

Blasdel's subsequent predatory lending study committee turned out to be a waste of time. Though 13 hearings were held across the state and almost 70 witnesses interviewed, Blasdel didn't help usher a single recommendation into law. A handful of suggestions were pooled into a bill in mid-2004, which, without any committee hearings, to be held at Blasdel's behest, died a quiet death.

At one lending industry conference, Lisa Rice asked about Ohio's recent predatory lending law. A leading lobbyist for subprime mortgage lenders responded, "Oh, that law doesn't matter."

THAT'S BECAUSE the focus was on states that, since 1999, had begun passing lending laws with teeth. So the lending industry was looking for something akin to Ohio's weak law at the national level - a federal law that would placate critics with minimal curbs on abuses but ultimately preempt strong state restrictions on predatory lending.

Again, they found an ally in Ohio. In 2000, Republican Congressman Bob Ney introduced a bill that preempted state laws and helped mortgage lenders better hide the fees they made to brokers for originating higher-cost loans. It didn't pass, but by 2003 Ney was a member of the House Financial Services Committee, and came out a second time with the same provisions, under the title "The Responsible Lending Act."

It made little progress, until 2005, when Ney teamed with Pennsylvania Democrat Paul Kanjorski to reintroduce the bill. Eighteen Democrats and 22 Republican signed as co-sponsors this time. This version kept preemption, allowed lenders to continue charging phenomenal fees and weakened existing federal law by limiting the ability victims of predatory loans had to defend their homes from foreclosure.

The good government group Common Cause estimates that, between 1998 and 2005, the mortgage lending industry invested more than $200 million on Washington lobbying and campaign contributions.

Ney and Kanjorski received a combined $300,000 from the mortgage lending industry in that same time.

A companion anti-predatory lending bill co-sponsored by about 70 Democrats was embraced by consumer advocates but ignored by a Republican-led Congress.

High-powered lobbyist Andrew Wright, ranked as one of Washington, DC's finest, also represented the Coalition for Fair and Affordable Lending, a collection of subprime mortgage banks, and rallied behind Ney's bill.

If not for Ney's legal troubles throughout much of 2006, when federal prosecutors opened a wide-ranging probe into pay-to-play dealings between Ney and disgraced lobbyist Jack Abramoff, it's likely that his bill would have had traction. But by September 2006, Ney had pleaded guilty to conspiracy and making false statements. In March, he began a 30-month prison sentence. All the while, the foreclosure epidemic, led by Ohio, seeped into other states, and almost daily newspaper headlines.

LAST SPRING, Ohio lawmakers finally wised up and passed SB 185. Now, all mortgage lending transactions are subject to consumer protection laws. Consumers can seek monetary redress in civil courts, and the state attorney general can pursue criminal actions against corrupt appraisers, brokers without licenses, and other kinds of fraud. Most important, the law requires better disclosures, prohibits certain excessive fees and says mortgage brokers and lenders have a fiduciary duty to borrowers, not banks.

Though good for consumers, such state laws create different playing fields across the country. Some banks are better regulated in some states, while others are only subject to federal regulation and escape state scrutiny altogether. Shortly after SB 185 passed in Ohio, a lame-duck General Assembly took two steps back. It pushed through a $5,000 cap on monetary damages won through civil consumer protection actions, effectively eliminating many civil court cases from ever coming forward.

So a uniform national standard, consumer advocates argue, that all participants in the lending industry must follow, and that has strong enforcement and liability clauses, would stop ongoing and future abuses. It's why Congress has recently turned its attention to matters of both federal legislation and regulation.

Last week alone, there were three separate hearings in the US House and Senate.

After listening to the fate of two Clevelanders, Sen. Sherrod Brown wanted to know, "What can be done to stop these lenders from engaging in abusive practices?"

That same afternoon, a House committee sharply rebuked eight different federal regulators, including the Federal Reserve Board. Rep. Carolyn McCarthy of New York asked, "Didn't you see any warning signs before?" The following day, New York Sen. Charles Schumer berated a panel of mortgage lending representatives. "The economy is not the problem here. It's the product, stupid," Schumer fumed in opening remarks.

In May, Schumer, along with Sens. Brown and Pennsylvania Democrat Robert Casey, introduced the Borrower's Protection Act. The senators want laws that set stringent guidelines for mortgage loan originators, require them to apply an ability-to-pay standard to all borrowers, hold lenders accountable for brokers' and appraisers' actions, and create clear lines of monetary liability.

The bill isn't perfect by consumer advocates' standards, but they say it's among the best and most viable so far. (A host of senators and congressmen, including Ohio Sen. George Voinovich, have also introduced complementary bills.) Schumer and Brown's bill is now at the doorstep of Sen. Chris Dodd, the chairman of the US Senate Committee on Banking, Housing and Urban Affairs, and the only one who can move the legislation forward.

Dodd, however, who is also running a presidential campaign, while holding hearings, seems to have other plans. A banking committee hearing in March, called "Mortgage Market Turmoil," summoned a variety of banks and mortgage lenders, and the different federal agencies that oversee them, including the Federal Reserve Bank.

In a later statement, Dodd said that the hearing exposed the "regulatory foot-dragging by the Federal Reserve Board and other federal regulators in addressing predatory lending practices in the subprime market. Indeed, at the hearing, the Federal Reserve acknowledged that not enough had been done."

Dodd went on to chronicle a 2000 proposal by one Fed leader that would have extended the Fed's oversight to many in the subprime market, which remains outside the jurisdiction of federal regulators. "The former chairman of the FRB explicitly rejected [this proposal]," Dodd went on.

Since then, Dodd seems to have taken a wait-and-see approach. He's asked the Fed to "move quickly" and create rules that protect consumers. He's also asked lenders to sign a "Statement of Principles," a list of action items conscientious lenders should adopt, like loan term remodifications and low-cost refinances for borrowers who find themselves in default or foreclosure.

It's a strategy the lending industry likes. But consumer activists like COHHIO's Bill Faith and the National Center for Responsible Lending, a nonprofit research and policy group, are disappointed in Dodd's efforts. Nothing he's done forces change. They're hoping for more activity from the House.

That's where the Committee on Financial Services, chaired by Rep. Barney Frank (D-Mass.), and its various subcommittees have been holding almost monthly hearings on the foreclosure issue. Though nothing has yet to be proposed or introduced, Frank's office says he's working on a "multi-faceted housing bill," which will address problems in the mortgage market, like improper disclosure, lender liability and consumer rights.

The philosophy in play, explained press secretary Steve Adamske, is that Frank doesn't "want to over-legislate and suffocate the subprime market, but wants to end people being preyed upon."

For now, members of Congress seem to be on a fact-finding mission. Any legislation, to be effective, will have to dovetail with changes in the federal regulatory structure as well. How consumers will be protected in the future is a task Congress needs to make sure federal regulators are up to, or do it themselves - and fast.

Otherwise, as so many warn, there will be no safety net to catch and stop the next crop of even more inventive predatory lending practices.