FOR IMMEDIATE RELEASE
ICBA Urges HUD to Allow Adequate Notice and Comment on GSE Goals and Predatory Lending
Washington, D.C. (August 8, 2006)—The Independent Community Bankers of America (ICBA) objects to "fast-track" rule changes proposed by the Department of Housing and Urban Development (HUD) regarding loans that qualify towards affordable housing goals for the two mortgage-related government sponsored agencies, Fannie Mae and Freddie Mac.
"ICBA strongly opposes predatory lending and supports efforts to curtail it," ICBA wrote in a comment letter to HUD. "Fannie Mae and Freddie Mac should not purchase predatory loans and their housing goals are one tool in the prevention process."
However, ICBA is concerned about HUD's proposed use of a "fast-track" notice and comment process. "We recognize that HUD and the GSEs must be responsive to rapid changes in predator practices, but all lenders must be given appropriate notice and sufficient time to give their perspective on any terms or conditions that HUD believes are unacceptable." ICBA said. "In this regard, we urge HUD to follow the Administrative Procedures Act when giving notice rather than using a 'fast-track' approach."
A universal definition for a predatory loan does not yet exist; what may be a predatory loan for one customer may not be for another. Thus, it is important that the GSEs and their lender partners have ample opportunity to respond to any HUD proposal to classify loan terms and conditions as predatory. ICBA also asks HUD to work closely with banking regulators when determining predatory practices to ensure consistency in regulatory oversight.
Read the comment letter at www.icba.org.