ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release June 25, 2002 #02-31
E-mail: [email protected]

ACB URGES OTS TO RECONSIDER PARITY ACT PROPOSAL

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Editors, Reporters:

America’s Community Bankers has urged the Office of Thrift Supervision to reconsider a proposed regulation that would no longer make the agency’s rules on prepayment penalties and late charges applicable to state housing lenders. The effect of the proposal would be to allow state governments to restrict state-chartered lenders offering loans with those loan features, in the name of combating predatory and abusive practices.

ACB pointed out in its comment letter that the proposed rule change would also apply to loans made by the 642 state-chartered savings associations and savings banks that are already highly regulated and supervised, putting them at a competitive disadvantage.

ACB said the loan features serve a useful purpose to both lenders and consumers. “If a loan has a prepayment penalty, the interest rate may be lower, thus enabling the borrower to afford a loan he or she may not otherwise be able to afford,” ACB said.

“We believe that additional enforcement of the laws and regulations governing the operations of state housing creditors and borrower education are more effective in combating abuses than restricting the loan terms for which a federal preemption will apply to certain lenders,” ACB said.

One of ACB’s priority issues in 2002 is promoting financial literacy to mitigate abusive lending. “The importance of homeownership counseling cannot be overemphasized in helping borrowers avoid becoming victims of predatory lenders,” ACB said.

To view comment letter, click HERE.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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