Regulators Show United Front on Targeted Lending Programs
Federal finance and housing regulators today issued a statement to assure lenders they are on the same page when it comes to special purpose credit programs.
The missive from the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, the Department of Justice and the Federal Housing Finance Agency urged creditors to “explore opportunities to develop special purpose credit programs,” as long as they are within the bounds of the Equal Credit Opportunity Act, Regulation B and safe and sound lending practices.
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Mortgage lenders still have reservations about implementing targeted lending programs. That there is no safe harbor for special purpose credit programs is a sticking point, said Andy Arculin, a partner at Blank Rome LLP, who was previously senior counsel in the CFPB’s Office of Regulations.
Lenders are expected to implement the programs, Arculin said, but they then may get examined for compliance, or sued for violating ECOA.
“If the regulators were willing to give someone a decision with a safe harbor behind it, lenders would be much more inclined to develop the programs,” said Arculin. “If you don’t have assurances it’s bulletproof or kosher, it’s a risk.”
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"Regulators Show United Front on Targeted Lending Programs," by Georgia Kromrei was published in HousingWire on February 22, 2022.