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Highlights:
- The two proposed illustrations are intended to assist institutions in providing
consumer information as discussed in the Consumer Protection Principles portion of the
interagency Subprime Statement.
- The illustrations include a narrative explanation of some of the key features of
certain adjustable rate mortgage (ARM) loans identified in the Subprime Statement, and
a chart with numerical examples designed to show the potential consequences of payment
shock for an ARM loan structured with a discounted interest rate for the first two
years.
- Use of the illustrations by institutions is optional.
- The agencies are requesting comment on the usefulness of the two proposed
illustrations to institutions considering implementing the consumer protection portion
of the Subprime Statement.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer; Chief Compliance Officer
Related Topics:
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
Attachment:
Proposed Illustrations - PDF Help
Contacts:
Victoria Pawelski, Policy Analyst, at vpawelski@fdic.gov or
(202) 898-3571; Mira Marshall, Acting Chief, CRA/Fair
Lending Section, at mmarshall@fdic.gov or (202)
898-3912;
or Richard Foley, Counsel, at rfoley@fdic.gov or (202)
898-3784
Note:
FDIC financial institution letters (FILs) may be accessed
from the FDIC's Web site at
www.fdic.gov/news/news/financial/2007/index.html.
To receive FILs electronically, please visit
http://www.fdic.gov/about/subscriptions/fil.html.
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).
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