The Federal Reserve Board laid out a new rule in mid-July to better protect consumers and facilitate responsible lending.
This rule is an amendment to the home mortgage provisions of Regulation Z (Truth in Lending). Anecdotal evidence gathered from many sources has indicated that few small and community bankers in the Eighth District engaged in sub-prime loans. However, as a banker or other lender, here's what you need to know:
Fed Chairman Ben Bernanke said in mid-July, "The new rules...will establish lending standards aimed at curbing abuses while preserving responsible sub-prime lending and sustainable homeownership. ...We believe the new rules will help to restore confidence in the mortgage market."
See the full details at www.federalreserve.gov/newsevents/press/bcreg/regz20080714.htm.