Industry News

Lending industry warns against regulatory crackdown

Federal regulators drafting new guidance for subprime lending

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Federal regulators should expedite the process of issuing new guidelines for subprime mortgage lending and reject any industry attempts to water them down, members of the influential Senate Banking Committee say. But a group of six industry trade associations warns that overly restrictive policies would shut some worthy borrowers out of the home-buying market. In a statement issued Monday, industry groups -- including the American Bankers Association, the Mortgage Bankers Association and the Housing Policy Council -- said any new regulations, including forthcoming federal guidelines on subprime lending, must strike "a careful balance that provides enhanced consumer protections without unintentionally limiting the availability of home ownership to creditworthy borrowers." From the industry's perspective, one problem with the proposed guidelines is that they will apply only to federally chartered banks and savings and loans, unless states choose to adopt them on a case-by-...