FDIC Reaffirms Supervisory Policy on Predatory Lending

Published: January 31, 2007

<table width="507"><tbody><tr><td class="itemheader"></td></tr><!– Story –><tr><td class="blacktext" width="500">The Federal Deposit Insurance Corporation has issued a Financial Institution Letter reaffirming its concerns over predatory lending and signalling its intent to curb abusive practices through its examinations of banks. Among the red flags it will look for: 1) making loans based on the assets of the borrower instead of the borrower's ability to repay; 2) repeated refinancings to generate high points and fees each time (&quot;loan flipping&quot;); and 3) misrepresenting the &quot;true nature of the loan&quot; so consumers don't understand their obligations.</td></tr></tbody></table>

Last modified: January 31, 2007 at 2:45 pm | Originally published: January 31, 2007 at 2:45 pm
Printed: September 27, 2020