May 01, 2006

Board to hold four public hearings on the home equity lending market

For immediate release

The Federal Reserve Board on Monday invited consumers, consumer advocacy organizations, lenders, and other interested parties to participate in four public hearings on the home equity lending market.

The Board is holding the hearings under the Home Ownership and Equity Protection Act (HOEPA), which was enacted in 1994 in response to reports of predatory home equity lending practices in underserved markets. HOEPA amended the Truth in Lending Act (TILA) to impose additional disclosure requirements and limits on certain high-cost, home-secured loans. HOEPA also directs the Board to periodically hold public hearings to examine the home equity lending market and the adequacy of existing regulatory and legislative provisions for protecting the interests of consumers, particularly low-income consumers.

The Board last held such hearings in 2000. Those hearings focused on ways the Board might use its rulemaking authority under HOEPA to address concerns about predatory lending. Following those hearings and the receipt of public comment, the Board amended the provisions of Regulation Z that implement HOEPA. The revisions took effect in October 2002.

The Board's 2006 hearings will focus on three topics: (1) predatory lending and the impact of the HOEPA rules, and state and local anti-predatory lending laws on the subprime market; (2) nontraditional mortgage products such as interest only mortgage loans and payment option adjustable rate mortgages, and reverse mortgages; and (3) how consumers select lenders and mortgage products in the subprime mortgage market. Time will be reserved after panel discussions by invited speakers for brief statements from other interested parties.

The hearing discussions will serve four objectives. First, the Board wishes to gather information on the effectiveness of the 2002 revisions to the HOEPA rules in protecting consumers and on the rules' impact on the availability of credit in the higher-cost portion of the subprime market. Second, the Board would like to gather information that will assist its pending review of Regulation Z, which implements TILA and HOEPA. Third, the hearings will focus on matters for which the Board or other entities can develop educational materials to help consumers make informed choices about mortgage loans. Fourth, the hearings will identify mortgage lending market issues that require additional research.

The first hearing is scheduled for Wednesday, June 7, 2006, at the Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois. The second is scheduled for Friday, June 9, 2006, at the Federal Reserve Bank of Philadelphia, Ten Independence Mall, Philadelphia, Pennsylvania. The third is scheduled for Friday, June 16, 2006, at the Federal Reserve Bank of San Francisco, 101 Market Street, San Francisco, California, and the fourth is scheduled for Tuesday, July 11, 2006, at the Federal Reserve Bank of Atlanta, 1000 Peachtree Street, N.E., Atlanta, Georgia.

All hearings are scheduled from 8:30 a.m. to 4:00 p.m., and will begin with panel discussions by invited speakers. Other interested parties may deliver oral statements of five minutes or less at a one-hour "open-mike" period starting at about 3:00 p.m. Written statements of any length may be submitted for the record. Anyone interested in presenting an oral statement is asked to contact the Board in advance of the hearings by calling (202) 452-3667. As more information about the agenda for each hearing becomes available, it will be posted on the Board's web site.

Written comments may be mailed to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551 or mailed electronically to

Public comments are due by August 15, 2006. A notice of the hearings and request for public comment is attached.

Attachment (66 KB PDF)

Last Update: May 01, 2006