The Federal Reserve Board will hold public hearings on home equity lending because of predatory-lending concerns.
The Fed said Monday it invited borrowers, consumer advocacy organizations, lenders, and other interested parties to participate in four hearings it will hold under the Home Ownership and Equity Protection Act to examine practices and adequacy of regulations within the home equity lending market.
HOEPA was enacted in 1994 and amended the Truth in Lending Act to impose additional disclosure requirements and limits on certain high-cost, home-secured loans.
The hearings will focus on predatory lending and the impact of HOEPA, as well as state and local anti-predatory lending laws in the subprime market and nontraditional mortgage products such as interest-only and payment option mortgages, according to the announcement. How subprime borrowers select lenders and mortgages will also be discussed.
The Fed reportedly last held HOEPA public hearings in 2000, when focus on how the board might use its rule making authority under HOEPA to address concerns about predatory lending resulted in revised Regulation Z provisions that took effect in October 2002.
Through the hearings, the Fed wishes to gather information on the effectiveness of the 2002 revisions in protecting consumers and the rules' impact on the availability of credit in the higher-cost portion of the subprime market, as well as use feedback to assist its pending review of Reg Z, to develop educational materials on mortgage loans and identify mortgage lending market issues that require additional research.
The hearings will take place June 7 at the Federal Reserve Bank of Chicago, June 9 at the Federal Reserve Bank of Philadelphia, June 16 at the Federal Reserve Bank of San Francisco, and July 11 at the Federal Reserve Bank of Atlanta. Attendees have opportunity to deliver oral statements and written statements of any length may be submitted for the record.