|FOR IMMEDIATE RELEASE:||
Wednesday, December 12, 2001
CONTACT: Jesse Jacobs
Senator Paul S. Sarbanes, the Chairman of the Senate Banking, Housing, and Urban Affairs Committee, today commended the unanimous decision by the Federal Reserve Board of Governors to approve amendments to the implementing regulations of the Home Ownership and Equity Protection Act of 1994 (HOEPA), which will enhance consumer protections for mortgage borrowers.
Sarbanes made the following statement:
"The Board's unanimous vote is an important step forward in the battle against predatory lending practices which have threatened to undermine efforts to revitalize communities and expand homeownership opportunities in neighborhoods across this nation.
"I am particularly pleased that the Board retained key amendments from its proposal that will make HOEPA more effective against the most abusive loan practices and terms --- many of which were highlighted during two days of Senate Banking Committee hearings in July. These amendments include decreasing the annual percentage rate (APR) trigger for first-lien mortgages from 10 percent to 8 percent above the rate for Treasury securities to expand the number of loans receiving protection under HOEPA; including premiums for credit insurance products in the HOEPA points and fee trigger to help reduce one of the most prevalent forms of equity stripping; and limiting refinancing within a twelve-month period to protect equity.
"The Senate Banking Committee will continue to examine abusive and deceptive lending practices and looks forward to working with the Federal Reserve Board, other regulators, community groups, and industry to curb predatory lending practices."