[Federal Register Volume 65, Number 134 (Wednesday, July 12, 2000)]
[Proposed Rules]
[Pages 42889-42893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17520]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 65, No. 134 / Wednesday, July 12, 2000 /
Proposed Rules
[[Page 42889]]
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Regulation Z; Docket No. R-1075]
Truth in Lending
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Public hearings and request for comments.
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SUMMARY: The Board will hold public hearings on predatory lending
practices in the home-equity lending market, and invites consumers,
consumer advocacy organizations, lenders, and other interested parties
to attend and to provide written comments on relevant issues. The
hearings will be held pursuant to the Home Ownership and Equity
Protection Act of 1994, which amended the Truth in Lending Act to
impose disclosure requirements and substantive limitations on certain
closed-end mortgage loans bearing rates or fees above a certain
percentage or amount. The act directs the Board to examine the home-
equity loan market and the adequacy of existing Truth in Lending
provisions in protecting the interests of consumers.
DATES: Hearings. The hearings are scheduled as follows:
1. Charlotte, North Carolina, July 27, 2000, 9 a.m. to 4:30 p.m.
2. Boston, Massachusetts, August 4, 2000, 9 a.m. to 4:30 p.m.
3. San Francisco, California, September 7, 2000, 9 a.m. to 4:30
p.m.
Comments. Comments from persons unable to attend the hearings or
wishing to submit written views on the issues raised in this notice
must be received by Friday, September 1, 2000.
ADDRESSES: Hearings. Hearings will be held at the following locations:
1. Charlotte, North Carolina--Federal Reserve Bank of Richmond,
Charlotte Branch, 530 East Trade Street.
2. Boston, Massachusetts--Federal Reserve Bank of Boston, 600
Atlantic Street.
3. San Francisco, California--Federal Reserve Bank of San
Francisco, 101 Market Street.
Comments. Comments on the questions listed in this document should
refer to Docket No. R-1075, and may be mailed to Ms. Jennifer J.
Johnson, Secretary, Board of Governors of the Federal Reserve System,
20th Street and Constitution Avenue, NW, Washington, DC 20551 or mailed
electronically to [email protected]. Comments addressed
to Ms. Johnson may also be delivered to the Board's mail room between
8:45 a.m. and 5:15 p.m. weekdays, and to the security control room at
all other times. The mail room and the security control room, both in
the Board's Eccles Building, are accessible from the courtyard entrance
on 20th Street between Constitution Avenue and C Street, NW. Comments
may be inspected in room MP-500 in the Board's Martin Building between
9 a.m. and 5 p.m., pursuant to the Board's Rules Regarding the
Availability of Information, 12 CFR part 261.
FOR FURTHER INFORMATION CONTACT: Kyung Cho-Miller, Counsel, or Jane E.
Ahrens, Senior Counsel, Division of Consumer and Community Affairs, at
(202) 452-3667 or 452-2412; for the hearing impaired only, contact
Janice Simms, Telecommunication Device for the Deaf, (202) 872-4984.
For directions and other matters relating to the meeting facilities
in Charlotte, contact Mary Chick, (704) 358-2495; in Boston, Cynthia
Reardon, (617) 973-3512; in San Francisco, Lena Robinson, (415) 974-
2422.
SUPPLEMENTARY INFORMATION:
I. Background
In 1994, the Congress enacted the Home Ownership and Equity
Protection Act of 1994 (HOEPA) as an amendment to the Truth in Lending
Act (TILA). HOEPA was a response to anecdotal reports of abusive
lending practices whereby unscrupulous lenders made unaffordable home-
secured loans to ``house-rich but cash-poor borrowers.'' These cases
frequently involved elderly and sometimes unsophisticated homeowners
who were targeted for loans with high rates and fees and repayment
terms that were difficult or impossible for the homeowners to meet.
Oftentimes the transactions involved fraud or unlawful
misrepresentations by lenders or brokers.
HOEPA does not prohibit creditors from making any type of home-
secured loan, nor does it limit or cap rates that creditors may charge.
Instead, the act identifies a class of high-cost mortgage loans through
rate and fee triggers. For transactions covered by HOEPA, creditors
must provide abbreviated disclosures to consumers at least three days
before the loan is closed, in addition to the disclosures generally
required by TILA. When combined with TILA's three-day right of
rescission after the loan closing, the HOEPA disclosures afford
consumers a minimum of six days to consider key loan terms before
finally deciding to enter into a transaction. Transactions covered by
HOEPA are also subject to substantive limitations that prohibit certain
terms from being included in the loan agreement.
HOEPA directs the Board, in consultation with its Consumer Advisory
Council, to conduct public hearings periodically to examine home-equity
loans in the marketplace and consider the adequacy of federal laws
(including HOEPA) in protecting consumers--particularly low-income
consumers. In June 1997, within two years after HOEPA became effective,
the Board held hearings on home-equity lending and HOEPA. The results
of those hearings were summarized and submitted to the Congress by the
Board and Department of Housing and Urban Development (HUD) in July
1998, in a joint report concerning reform of TILA and the Real Estate
Settlement Procedures Act.
Predatory lending practices in home-secured loans continue to
receive attention from the Congress and regulatory agencies. The
available information concerning predatory lending is essentially
anecdotal; there is no ready method for measuring the amount of
predatory lending or determining how prevalent a problem it represents.
There are enough anecdotal reports, however, to suggest that predatory
lending continues to be a problem. Abusive practices may involve, among
other things, excessive fees and interest rates, unnecessary insurance,
and fraud. Borrowers saddled with unaffordable payments can lose their
homes. Excessive up-front fees combined with frequent refinancings
[[Page 42890]]
(often referred to as ``loan flipping'') may also strip the equity from
consumers'' homes.
Given the wide range of practices that predatory lending may
involve, a multifaceted approach to dealing with the problem, including
both regulatory and nonregulatory strategies, is likely to be the most
effective. This includes strengthening enforcement of current laws,
voluntary industry action, community outreach efforts, and consumer
education and counseling. Several bills taking different approaches to
addressing predatory lending have been introduced in the Congress.
Several states have enacted or are considering legislation. The Board
has convened a nine-agency working group, including the five federal
agencies that supervise depository institutions, HUD, the Office of
Federal Housing Enterprises Oversight, the Department of Justice, and
the Federal Trade Commission. The aims of the group are to tighten
enforcement of existing statutes and to establish a coordinated
approach to addressing predatory practices.
On May 24, the Board presented testimony at a hearing held by the
House Committee on Banking and Financial Services on predatory lending
and possible remedial actions. HUD and the Department of the Treasury
have convened a National Task Force on Predatory Lending. The primary
mission of the Task Force has been to collect information about
predatory lending, provide data on the impact of predatory practices,
and comment on existing legislative proposals for reform in order to
provide a basis for HUD and Treasury to make recommendations for
legislation to the Congress. To solicit information about local and
national aspects of the predatory lending problem, HUD and Treasury
held five pubic forums in Los Angeles, Chicago, New York, Atlanta, and
Baltimore. On June 20, HUD and Treasury issued a report on their
findings, that discusses possible ways to curb predatory lending and
contains recommendations to the Congress regarding possible legislative
action and to the Board regarding the exercise of the Board's
regulatory authority under HOEPA.
The Board's home-equity hearings under HOEPA will be primarily
focused on the Board's regulatory authority under that act, and
specific ways that the Board might consider exercising that authority.
As described below, the Board is authorized to make some adjustments to
HOEPA's high-cost triggers that could affect the scope of the act's
coverage. The Board is also directed by HOEPA to prohibit certain acts
and practices in connection with mortgage loans if the Board makes the
finding required by the statute. Based on information gathered during
recent public hearings, the interagency discussions, and meetings with
industry and consumer representatives, the Board has developed a series
of questions for discussion at the HOEPA hearings and for public
comment. These questions are intended to solicit views on the ways that
the Board might exercise its authority, and will be used to focus the
discussion at the HOEPA hearings on possible regulatory approaches to
deter predatory lending.
The Truth in Lending Act and HOEPA
The Truth in Lending Act (TILA) (15 U.S.C. 1601 et seq.) is
intended to promote the informed use of consumer credit by requiring
disclosures about its terms and cost. The act requires creditors to
disclose the cost of credit as a dollar amount (the ``finance charge'')
and as an annual percentage rate (the ``APR''). Uniformity in
creditors' disclosures is intended to assist consumers in comparison
shopping. TILA requires additional disclosures for loans secured by a
consumer's home and permits consumers to rescind certain transactions
that involve their principal dwelling. The act is implemented by the
Board's Regulation Z (12 CFR part 226).
The Home Ownership and Equity Protection Act of 1994 (HOEPA),
contained in the Riegle Community Development and Regulatory
Improvement Act of 1994, Pub. L. 103-325, 108 Stat. 2160, amends TILA
to impose disclosure requirements and substantive limitations on
certain home-secured loans (closed-end installment loans) with rates
and fees above a specified amount. A loan is covered by HOEPA if (1)
the APR exceeds the rate for treasury securities with a comparable
maturity by more than 10 percentage points, or (2) the points and fees
paid by the consumer exceed the greater of 8 percent of the loan amount
or $400 (adjusted annually based on the consumer price index). HOEPA is
implemented by section 32 of the Board's Regulation Z (12 CFR 226.32),
effective in October 1995. 60 FR 15463, March 24, 1995.
HOEPA does not prohibit creditors from making any home-secured
loan, nor does it limit or cap rates that creditors may charge.
Instead, HOEPA layers disclosure and timing requirements onto the
requirements already imposed for consumer credit transactions.
Creditors offering HOEPA-covered loans must provide abbreviated
disclosures to consumers three days before the loan is closed. The
disclosures provide that consumers are not obligated to complete the
closing, remind borrowers that they could lose their home if they fail
to make payments, and state a few key cost disclosures, including the
APR, the regular payment, and, if the loan has a variable rate, a
``worst case payment'' if rates increase as high and quickly as
possible under the loan agreement.
In addition, creditors making HOEPA-covered loans are prohibited
from including in their loan agreements, among other provisions: (1)
Balloon payments in loans with maturities of less than five years, (2)
payment schedules that result in negative amortization, (3) higher
default interest rates, and (4) prepayment penalties in most instances.
Consumers entering into a HOEPA-covered loan may rescind the
transaction for up to three years after closing if creditors fail to
provide the early disclosures or if they include a prohibited term in
the loan agreement.
Home-purchase loans are not covered by HOEPA. Although reverse
mortgages are exempt from the HOEPA requirements imposed for
traditional mortgages, reverse mortgages are subject to an alternative
detailed disclosure scheme under HOEPA (implemented by section 33 of
Regulation Z). Home-equity lines of credit (open-end credit) are also
exempt from HOEPA, as congressional hearings preceding enactment did
not reveal evidence of abusive practices connected with open-end home-
equity lending.
In June 1997, the Board held hearings on home-equity lending and
HOEPA in Los Angeles, Atlanta, and Washington, DC. Participants were
asked to address several topics, including the effect of HOEPA on
homeowners seeking home-equity credit and on credit opportunities in
the communities targeted by the legislation (for example, whether there
had been changes to the volume or cost of home-equity installment
loans); the effectiveness of the disclosures and suggestions for
improvements; and whether any exemptions or prohibitions would be
appropriate for the Board to consider under its HOEPA rulemaking
authority. 62 FR 23189, April 29, 1997.
Those testifying at the hearings generally concurred that it was
too soon after HOEPA's enactment to determine the effectiveness of the
new law. However, consumer representatives reported continuing abusive
practices by home-equity lenders of all degrees of sophistication. The
hearings formed the basis for a detailed analysis of the problem of
abusive lending practices in mortgage lending contained in a July
[[Page 42891]]
1998 report to the Congress by the Board and HUD on possible reforms to
TILA and the Real Estate Settlement Procedures Act regarding mortgage-
related disclosures. (The 1998 joint report is available at the Board's
website address: www.federalreserve.gov/boarddocs/press/general/1998.)
Chapter 6 of the report suggested a multifaceted approach to curbing
predatory lending practices, including some legislative action,
stronger enforcement of current laws, and nonregulatory strategies such
as community outreach efforts and consumer education and counseling.
(See also Chapter 2 at page 17, Chapter 7 at page 76, and Appendix D.)
II. Public Hearings
Since HOEPA's enactment, the volume of home-equity lending has
increased significantly. This overall growth in home-equity lending has
been accompanied by a sharp boost in the subprime mortgage market. HUD
reports that the number of subprime home-equity loans has increased
from 80,000 in 1993 to 790,000 in 1998.
The growth in subprime lending brought a substantial increase in
the availability of credit to borrowers having less-than-perfect credit
histories and to other consumers who do not meet the underwriting
standards of prime lenders. Because consumers who obtain subprime
mortgage loans have, or perceive they have, fewer credit options than
other borrowers, they may be more vulnerable to unscrupulous lenders or
brokers. With the increase in the number of subprime loans, consumer
advocates have been concerned for some time about the potential for a
corresponding increase in the number of predatory loans. Some industry
representatives have noted, however, that the trend toward securitizing
subprime mortgages has served to standardize creditor practices and to
limit the opportunity for widespread abuse.
To address concerns about predatory lending and consider approaches
the Board might take in exercising its regulatory authority under
HOEPA, the Board has scheduled three one-day hearings in Charlotte
(Thursday, July 27), Boston (Friday, August 4), and San Francisco
(Thursday, September 7). The hearings will seek statements from the
public about home-equity lending in general, but will focus
specifically on collecting testimony on the ways that the Board might
use its rulewriting authority under HOEPA to address predatory lending
practices in the home-equity market. To focus the discussion at the
hearings, interested parties wishing to present oral statements at the
hearings (and persons submitting written comments to the Board) are
asked to address the issues set forth below, as applicable:
A. Adjusting the HOEPA Triggers
HOEPA covers mortgage loans that meet one of the act's two ``high-
cost'' triggers. A loan is covered if (1) the APR exceeds the rate for
treasury securities with a comparable maturity by more than 10
percentage points, or (2) the points and fees paid by the consumer
exceed the greater of 8 percent of the loan amount or $400. The Board
is required to adjust the $400 threshold annually, based on the
consumer price index; for 2000 the amount is $451.
1. APR Trigger
HOEPA authorizes the Board to adjust the HOEPA trigger by 2
percentage points from the current standard of 10 percentage points
above the U.S. Treasury securities with comparable maturities. Some
consumer advocates and others have suggested that, based on the current
APR trigger, only a small percentage of subprime mortgage loans are
covered by HOEPA. They contend that lowering the APR trigger would
allow HOEPA's protections to be extended to a broader class of
transactions.
Would lowering the APR trigger to 8 percentage points be
effective in furthering the purposes of HOEPA, and if so, how?
If the APR trigger were lowered, would such action have
any significant impact on the availability or cost of subprime mortgage
loans?
The Board also solicits comment on any available data regarding the
percentage of subprime mortgage loans covered under the existing APR
trigger, and the percentage of transactions that would be affected by
lowering the trigger by 2 percentage points.
2. Points and Fees Trigger
A loan is covered by HOEPA if the points and fees paid by the
consumer exceed the greater of 8 percent of the loan amount or $400.
For this purpose, ``points and fees'' include all items included in the
finance charge and APR except interest, and all compensation paid to
mortgage brokers. The act specifically excludes reasonable closing
costs that are paid to unaffiliated third parties. HOEPA also
authorizes the Board to add ``such other charges'' to the points and
fees test as the Board deems appropriate. Accordingly, comment is
solicited on what fees, if any, should be added to the calculation. In
particular, comment is requested on the following:
a. Credit Insurance: Premiums paid for credit insurance that a
borrower is required to purchase are finance charges that are currently
included in both the APR and the points and fees test under HOEPA. But
premiums paid for optional credit life insurance currently are not
included in the points and fees test. Some consumer advocates assert
that because these premiums are excluded, predatory lenders may avoid
HOEPA coverage by ``packing'' loans with high-priced credit insurance
that represents a significant source of fee income, in lieu of charging
fees that would be included under the current HOEPA trigger.
What would be the effect of including lump-sum premiums
collected at closing for optional credit insurance in HOEPA's points
and fees test? Should such premiums be included only if they are paid
to the creditor or an affiliate of the creditor, or only to the extent
that the creditor receives compensation in connection with the sale of
the insurance?
b. Prepayment Penalties: In some cases, prepayment penalties may
provide fee income that is an additional incentive for creditors to
encourage frequent refinancings that are not in a consumer's interest.
If the consumer must pay a prepayment penalty to the same creditor that
is refinancing the loan, the prepayment fee could be viewed as a cost
of the new transaction.
What would be the effect of including a prepayment penalty
(assessed on the original loan) in HOEPA's points and fees test for the
new loan when the loan is refinanced with the same creditor (or an
affiliate)?
c. Points: Consumers who refinance their loans generally pay points
on the entire refinanced amount.
What would be the effect of adding any points paid by the
consumer for the existing loan to the points and fees test when the
same creditor (or an affiliate) refinances the loan within a specified
time period?
The current points and fees test under HOEPA is complex. The
statute allows many closing costs to be excluded from the calculation
if they are reasonable and paid to third parties. The Board solicits
comments on whether a better approach would be to recommend a statutory
amendment that would include all closing costs in the points and fees
test.
B. Restricting Certain Acts or Practices Under HOEPA
The hearings will explore how the Board's regulatory authority
under HOEPA to prohibit specific practices can be used to curb
predatory lending.
[[Page 42892]]
Under HOEPA, the Board is authorized to prohibit acts and practices:
In connection with mortgage loans--if the Board finds the
practice to be unfair, deceptive, or designed to evade HOEPA; and
In connection with refinancings of mortgage loans--if the
Board finds that the practice is associated with abusive lending
practices or otherwise not in the interest of the borrower.
Comment is invited on the following specific approaches to dealing
with predatory lending practices, and whether any new requirements or
prohibitions should apply to all mortgage transactions, only to
refinancings, or only to HOEPA-covered refinancings. Both regulatory
and legislative proposals should be discussed.
1. Credit insurance. Premiums for credit insurance are often
collected from the borrower at closing and added to the loan amount,
increasing the total finance charges paid by the consumer. Consumer
advocates express concern about high-pressure sales tactics, which may
mislead consumers about whether the insurance is required. The Board
previously recommended that the Congress consider prohibiting the
advance collection of premiums for credit insurance policies in
connection with HOEPA loans. If no statutory prohibition is adopted,
should the Board regulate the conditions under which such policies are
sold or financed? For example:
What would be the effect of the Board's requiring the sale
of single-premium policies to be accompanied by a disclosure that the
coverage may also be available with periodic premiums? What other
disclosures might be helpful?
To address concerns about ``insurance packing,'' what
would be the effect of the Board's requiring that the sale of single-
premium policies include a disclosure at the time of purchase of how
unearned premiums will be rebated if the policy is cancelled or the
loan is paid in full early?
What would be the effect of requiring notification to
borrowers, after the loan closing, of their right to cancel the policy
and obtain a refund?
What would be the effect of regulations prohibiting
creditors from selling single-premium insurance products until after
loan closing?
2. Unaffordable loans. Under HOEPA a creditor may not engage in a
pattern or practice of extending credit based on the collateral if
(given the consumer's current and expected income, current obligations,
and employment status) the consumer will be unable to make the
scheduled loan payments.
Would additional interpretative guidance on the ``pattern
or practice'' requirement be useful, or are case-by-case determinations
more appropriate? If additional guidance would be useful, what elements
of the requirement should the guidance address?
What regulatory standards could the Board adopt for
determining whether a creditor has considered the consumer's ability to
repay the loan in order to satisfy this requirement?
3. Refinancing lower-rate loans. When a consumer seeks a second
mortgage to consolidate debts or to finance home improvements, some
creditors also require the existing first mortgage to be paid off as a
condition of providing the new funds. This ensures that the creditor
will be the senior lien-holder, but may increase significantly the
points and fees paid for the new loan. Is regulatory action appropriate
to protect consumers from abuses and, if so, what type of action could
be taken without restricting credit in legitimate transactions?
4. Balloon Payments. Depending on the circumstances, mortgages with
a balloon payment feature may be attractive to some borrowers, but may
harm other consumers. HOEPA currently prohibits balloon payments for
high-cost loans that have terms of less than 5 years. Lenders that
price their loans just below HOEPA's triggers, however, might include
balloon payments that force consumers to refinance the loan and pay
additional points and fees.
For loans not covered by HOEPA's restriction on balloon
payments, are any restrictions or additional disclosures needed in
connection with balloon payments in order to prevent abusive practices?
To avoid evasions of HOEPA's restrictions on balloon
payments, what would be the effect of the Board's prohibiting ``payable
on demand'' clauses for HOEPA loans unless such a clause is exercised
in connection with a consumer's default? (A similar limitation already
exists for home-equity lines of credit.)
5. Prepayment penalties. Prepayment penalties allow creditors to
recover their transaction costs if loans are prepaid earlier than
expected. That rationale may not be relevant in cases where high rates
and up-front fees are charged. In such cases, the penalty might be used
to deter the consumer from refinancing the loan on more favorable
terms.
Is it feasible to limit the use of prepayment penalties to
transactions where consumers receive, in return, a benefit in the form
of lower up-front costs or lower interest rates? How might the
existence of such benefits be measured?
6. Foreclosures. Consumers who have been victims of abusive
practices must be afforded adequate opportunity to assert their rights
in order to avoid unwarranted foreclosures. State law and local
practice generally govern the procedures followed for foreclosures.
Some states require actual notice to the consumer, but in other states
notice by publication is sufficient. Even when consumers do receive
notice, they may not get adequate information about their legal
options.
What would be the effect of setting minimum federal
standards for foreclosures involving a consumer's primary dwelling? For
example, a creditor might be required to provide the consumer with
actual notice of: (1) The applicable foreclosure procedures; (2) any
legal rights the consumer may have to avoid the foreclosure; and (3)
the specific amount that, if paid in accordance with the notice, will
terminate the foreclosure.
7. Misrepresentations regarding borrower's qualifications. There is
some concern that many borrowers who obtain high-cost loans may
actually qualify for lower cost credit. Some brokers or creditors may
provide consumers with false or materially misleading information that
the consumer does not qualify for a lower cost loan based on the
creditor's underwriting criteria. Such a practice generally would be
illegal under state laws that protect against fraud and deception. What
benefit to consumers might be achieved if the Board issued a rule that
prohibited such misrepresentations as unfair and deceptive under HOEPA?
8. Reporting borrowers' payment history. Some creditors do not
report to consumer reporting agencies subprime borrowers' good payment
history in order to avoid having the borrowers solicited by competitors
for a refinancing on more attractive terms. What would be the effect of
requiring creditors that choose not to report borrowers' positive
payment history to disclose that fact?
9. Referral to credit counseling services. What regulatory action
would better enable consumers in general, or HOEPA borrowers in
particular, to take advantage of any available credit counseling
services?
10. HOEPA disclosures. In their 1998 report to the Congress, the
Board and HUD recommended amendments to the required disclosures,
including adding references to the availability of credit
[[Page 42893]]
counseling, using more ``user-friendly'' text in the narrative
reminders about the potential consequences for not making payments, and
requiring the consumer's monthly income to be disclosed in close
proximity to the consumer's monthly payment. Comment is requested on
those recommendations. Comment also is solicited on whether additional
information in the current HOEPA disclosures would benefit consumers.
For example:
The consumer must receive HOEPA disclosures three days
before loan closing, specifying the APR and monthly payment amount. Due
to the marketing practices of some lenders, consumers may not be aware
of high up-front costs that will be financed. What would be the effect
of the Board's requiring that the disclosure also include additional
information, such as the total loan amount on which the disclosed
monthly payment is based?
For HOEPA loans, what would be the effect of requiring
that consumers receive a complete Truth in Lending disclosure statement
three days before closing?
11. Open-end home equity lines. HOEPA does not cover home-equity
lines of credit. Is there evidence that lenders are using open-end
credit lines to evade HOEPA? If so, what benefit might be derived from
prohibiting the practice of structuring a home-secured loan as open-end
credit in order to evade the provisions of HOEPA? How could such
practices be identified and what limitations on these practices would
be appropriate to effect the purposes of HOEPA?
Community Outreach and Consumer Education
In addition to issues concerning the Board's regulatory authority
under HOPEA, views will also be elicited at the hearings about
nonregulatory approaches to curbing predatory lending, such as
community outreach and consumer education. Accordingly, the Board seeks
comment on the following:
What community outreach activities and consumer education efforts
are being pursued currently? Which types of products, programs, and
delivery systems have been most effective? What other strategies might
be implemented to reach the targeted populations? How might outreach
and education efforts be tailored to address some lenders' and brokers'
aggressive marketing practices? What role can government agencies play
in increasing the effectiveness of these programs?
Additional Data
The Board seeks information about any studies or data pertaining to
subprime lending or HOEPA loans that would be useful in determining how
the Board might use its regulatory authority under HOEPA. For example,
are there data regarding the percentage of HOEPA loans that result in
foreclosures? Are there data regarding the effect of HOEPA disclosures
showing the percentage of transactions cancelled by borrowers based on
disclosures provided before closing?
III. Form of Statements and Comments
These hearings are open to the public to attend. Invited speakers
will participate in panel discussions. In addition, about two hours is
reserved for brief statements by other interested parties, starting at
approximately 2:30 p.m. To allow as many persons as possible to offer
their views during this period, oral statements should be brief (five
minutes or less); written statements of any length may be submitted for
the record. Interested parties who wish to participate during this
``open-mike'' period are asked to contact the Board in advance of the
hearing date, to facilitate planning for this portion of the hearings.
The order of speakers generally will be based on their registration at
the hearing site on the day of the hearing.
Comment letters should refer to Docket No. R-1075, and, when
possible, should use a standard typeface with a font size of 10 or 12.
This will enable the Board to convert the text to machine-readable form
through electronic scanning, and will facilitate automated retrieval of
comments for review. Also, if accompanied by an original document in
paper form, comments may be submitted on 3\1/2\ inch computer diskettes
in any IBM-compatible DOS- or Windows-based format.
By order of the Board of Governors of the Federal Reserve
System, July 6, 2000.
Jennifer J. Johnson,
Secretary to the Board.
[FR Doc. 00-17520 Filed 7-11-00; 8:45 am]
BILLING CODE 6210-01-P