As Washington negotiated a bailout to ease the nation's credit crisis last week, Pennsylvania was putting the final touches on its own small piece of the solution -- new laws and regulations that aim to improve the quality of mortgages by imposing tighter lending restrictions on the state's banks and brokers.

In Pennsylvania, as elsewhere, lawmakers and banking regulators have been watching the mortgage meltdown with concern. Defaults here increased, many of them originating out of the subprime market -- for a group of consumers who, due to their credit ratings, wouldn't have been eligible for a more traditional loan product.

This summer, the Legislature passed a package of bills that aimed at reducing the number of people who take out loans beyond their ability to pay. At the same time, the state Department of Banking has been working on a major overhaul to its own banking regulations.

Last week, the Department of Banking submitted the final version of those new banking regulations to the Independent Regulatory Review Commission, which in turn will polish the rules and run them by the corresponding House and Senate committees, before they become the law of the land.

"Given the climate that we're in right now, we don't anticipate anybody opposing it," said Dan Egan, spokesman for the banking department.

The new banking regulations are essentially a code of conduct for lenders -- requiring clearer disclosure of loan provisions to borrowers, for instance, and eliminating the so-called "liar" loans, where banks or agents would arrange loans to customers even if they couldn't demonstrate their incomes or an ability to repay the loans.

But those wild and woolly times are behind us -- for now at least -- and some banks say the current market conditions have led to better self-policing.

On their own, banks are getting stingier with credit, already requiring better credit scores and more documentation from would-be borrowers.

So what effect will the new regulations, which should be in effect by the end of 2008 or the start of 2009, have on the lending climate in Pennsylvania?

Not much, Mr. Egan said. But the laws will provide protection when and if the economy rebounds and credit becomes more widely available.

As the new regulations are being honed, several of the bills that were signed by the governor this summer are likewise being readied for deployment, or already have taken effect.

A law that eliminates prepayment penalties for loans of $200,000 or less is now in effect; previously, the cap was $50,000. Prepayment penalties are fees charged to borrowers who want to pay off the loan early by selling the property or refinancing.

Set to take effect in November is the centerpiece of the summer package, a law that will require the 20,000 mortgage agents who do business in Pennsylvania to register with a tracking database. Until now, only mortgage agencies -- not the employees -- were required to be licensed.

The new licensing category would allow the state to more easily monitor individual mortgage brokers, including those who have a history of making bad loans. Brokers will have to register with the National Mortgage Licensing System.