Consumer Law

American Bankers Association Predicts Tougher Federal Rules Will Reduce Availability of Credit

By Jeff Sovern

by Jeff Sovern

The rules in question extended the HOEPA loan protections to more subprime loans.  The thing is, they were adopted by the Fed in 2000, over objections by the ABA that they would reduce the availability of credit.  See Sandra Fleishman, Fed Favors Tougher Loan Rules: Abuses in Subprime Lending Are Targeted, Washington Post, Dec. 14, 2000, at page E01.  Yet the volume of subprime lending skyrocketed after adoption of the rules, ultimately leading to the subprime crisis and the Great Recession.  So if the ABA's predictions were so wrong back then, how much credibility do they have now when making similar claims?

Full post as published by CL&P Blog on April 09, 2010 (boomark / email).