May 25, 2007

Statement of Chairman Dodd on Fed Response to Letter Regarding HOEPA

Senator Dodd, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today issued the following statement regarding a letter he received from the Federal Reserve Board that was sent in response to the Chairman’s April 24th letter:
    “I appreciate the fact that the Federal Reserve Board will be holding a hearing to consider action under the Home Ownership and Equity Protection Act (HOEPA). In my view, a hearing is simply a first step in the Board fulfilling its obligation under HOEPA to protect consumers from abusive lending practices. It is my hope that the Board will move quickly to meet that obligation and promulgate a regulation that, at a minimum, requires originators to fully evaluate a borrower’s ability to repay; requires escrows for taxes and insurance; and restricts the use of low- and no-documentation loans. These protections, while not comprehensive, will stem some of the most abusive practices we see in the marketplace today.”
Click here for the full text of the letter.