- The illustrations are intended to assist institutions in providing consumer information as discussed in the Consumer Protection Principles portion of the interagency Subprime Statement.
- A narrative illustration explains some of the key features of certain adjustable rate mortgage (ARM) loans identified in the Subprime Statement.
- The narrative emphasizes features that borrowers should understand - escrow payments or their absence, prepayment penalties, balloon payments, and premiums for no-doc/low-doc loans.
- Charts contain numerical examples that are designed to show the potential consequences of payment shock for an ARM loan structured with a reduced initial interest rate.
- Use of the illustrations by institutions is optional.
FDIC-Supervised Banks (Commercial and Savings)
Chief Compliance Officer
Statement on Subprime Mortgage Lending; Interagency Guidelines for Real Estate Lending; Interagency Guidelines on Subprime Lending; Expanded Examination Guidance for Subprime Lending Programs; Interagency Guidance on Nontraditional Mortgage Product Risks; and Unfair and Deceptive Acts and Practices by State-Chartered Banks
Proposed Illustrations - PDF 760k (PDF Help)
Samuel Frumkin, Senior Policy Analyst, at firstname.lastname@example.org or (202) 898-6602; or Richard Foley, Counsel, at email@example.com or (202) 898-3784
FIL-40-2008 - PDF (PDF Help)
FDIC financial institution letters (FILs) may be accessed
from the FDIC's Web site at
To receive FILs electronically, please visit
Paper copies of FDIC financial institution letters may be
obtained through the FDIC's Public Information Center,
3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-
275-3342 or 703-562-2200).