|BOARD OF GOVERNORS
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
|DIVISION OF BANKING
SUPERVISION AND REGULATION
|SR 01-4 (GEN)
January 31, 2001
The Board of Governors of the Federal Reserve System, along with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision (the Agencies), has developed expanded examination guidance on subprime lending. (See the attached interagency statement.) The purpose of the expanded guidance is to strengthen the Agencies' supervision of institutions with subprime lending programs. The guidance is directed primarily to those institutions that have subprime lending programs that equal or exceed 25 percent of tier 1 regulatory capital.
The Agencies continue to believe that responsible subprime lending can expand credit access for consumers and offer attractive returns provided that institutions recognize and manage the unique risks associated with this activity. This expanded guidance supplements the supervisory statement, Interagency Guidance on Subprime Lending (See SR letter 99-06) issued in March 1999.
The guidance discusses a number of issues including:
Reserve Banks are asked to distribute this SR letter and attached interagency guidance to regulated institutions in their districts and to their supervisory staff. Any questions may be addressed to Arleen Lustig, Supervisory Financial Analyst, at (202) 452-2987 or Norah Barger, Deputy Assistant Director, at (202) 452-2402.
SR letters | 2001