Calhoun Statement: On Interagency Subprime Guidance
Today federal financial regulators issued a key statement on subprime mortgage lending that applies to banks, subsidiaries and affiliates of banks, and credit unions. The statement requires these federally-regulated entities to take common-sense precautions before approving subprime home loans. This action by regulators represents an important first step toward bringing responsibility and integrity to the subprime market. The statement encourages better lending practices that will benefit homeowners in several ways. Notably, the guidance discourages lenders from assessing a borrower's ability