MCUL Main SIte » Michigan Credit Union League Home » Government Affairs » Regulatory Affairs » Home Equity Lending Hearings - (June 1, 2006)

To: All Affiliated Credit Union CEOs

From: Matt Beard - Regulatory Specialist

Date: June 1, 2006

RE: Home Equity Lending Hearings

Note: This new Comment Call format is designed to highlight the key issues associated with the proposed changes, with the option of going to the full description from CUNA. If the topic discussed is of interest, you may click on the link that will take you to the full explanation and questions associated with the changes. If you receive this information via fax or mail, and you do not have Internet access, please contact Angie Hall at 800-262-6285 to receive CUNA’s full proposal.


The Home Ownership and Equity Protection Act (HOEPA) requires the Federal Reserve Board (Fed) to hold public hearings periodically on home equity lending and the adequacy of existing regulatory and legislative provisions in protecting the interests of consumers. The following are the dates, times, and locations for the next set of these HOEPA hearings:

  • June 7, 2006 – 8:30 AM to 4:00 PM – Chicago, Illinois
  • June 9, 2006 – 8:30 AM to 4:00 PM – Philadelphia, Pennsylvania
  • June 16, 2006 – 8:30 AM to 4:00 PM – San Francisco, California
  • July 11, 2006 – 8:30 AM to 4:00 PM – Atlanta, Georgia

These meetings will be held at the Federal Reserve Banks in these respective cities and are open to the public. The public is also invited to send written comments on the issues that will be the focus of these hearings. These issues include:

  • Predatory lending and the impact of HOEPA and state and local predatory lending laws on the subprime market;
  • Nontraditional mortgage products and reverse mortgages; and
  • Consumer choice in the subprime market.

Written comments must be submitted to the Federal Reserve by August 15, 2006. Please submit your comments to MCUL by July 27, 2006. To view a copy of the Federal Reserve’s request, go to: To view a copy of CUNA’s analysis, go to: (You will need your username and password.)

InfoSight - For a list of the last changes made to HOEPA, go to, click on Regulatory Compliance and InfoSight, enter your user name and password, click on the InfoSight link at the top of the page, click on Loans and Leasing, and click on the HOEPA. Or you may click on: HOEPA.


Predatory Lending: The Impact of HOEPA and State and Local Predatory Lending Laws

  • Have the 2002 revisions to the HOEPA rules been effective in curtailing predatory lending practices? What has been the impact of the changes on the availability of subprime credit? What other, if any, abusive practices have emerged since these revisions were enacted?
  • What has been the impact of state and local predatory lending laws on curbing abusive practices? Have they adversely affected access to legitimate subprime lending?
  • Since the 2002 HOEPA revisions, what efforts to educate consumers about predatory lending have been successful? What is needed to help such efforts succeed?
  • How should the HOEPA disclosures required under Regulation Z be changed to improve consumers’ understanding of high-cost loans?

Nontraditional Mortgage Loans and Reverse Mortgages

  • Do consumers have sufficient information about nontraditional mortgage loans to understand the risks?
  • Should any current disclosures required under Regulation Z be eliminated or changed because they are confusing to consumers, unduly burdensome to creditors, or are not relevant to nontraditional mortgage loans? Do the current disclosures provide information about nontraditional mortgage loans in an understandable manner?
  • Are there Regulation Z disclosures that should be provided earlier in the mortgage shopping and application process to help consumers understand the cost and terms of these types of loans?
  • Are the current Regulation Z disclosures adequate to inform consumers about the costs and terms of reverse mortgages?
  • Has counseling, as required for reverse mortgages insured by the Department of Housing and Urban Development (HUD), been effective in educating consumers about reverse mortgages and preventing abuse?
  • Is counseling offered for mortgages that are not insured by HUD? Do borrowers of these loans have difficulty understanding the loan terms or encounter other problems? Have lenders used alternative disclosure approaches that have proven effective?

Topic 3 – Informed Consumer Choice in the Subprime Market

  • How do consumers who get higher priced loans shop for these loans and how do they select a particular lender?
  • What do consumers understand about the role of mortgage brokers? Has this understanding been furthered by state-required mortgage broker disclosures?
  • What strategies have been helpful in educating consumers about their options in the mortgage market? What efforts are needed to educate consumers about the mortgage credit process and how to shop and compare terms and fees?
  • What are some of the “best practices” that lenders, mortgage brokers, consumer advocates, and community development groups have used to help consumers understand the mortgage market and their loan choices?

If you have any further questions, or to submit a response, please contact:

Matt Beard ,
Michigan Credit Union League
112 East Allegan St.
Suite 800
Lansing, MI 48933

E-mail: Fax: (517) 482-3762

We a ppreciate Your Response.

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