Fed's New Loan Laws Don't Please Much of Anybody
Critics of the lending industry say the regulations released Tuesday by the Federal Reserve aren’t tough enough.
For one, they don’t help the millions of homeowners who currently have subprime mortgages and can’t afford to pay them.
The sweeping changes, to take effect early next year after a 90-day public comment period, will impose new restrictions on all of the country's mortgage lenders, brokers, and loan servicers.
"On the core provisions, the rules are weak and very burdensome to consumers," said Alys Cohen, staff attorney at the National Consumer Law Center.
The rules aren't tough enough on the lending industry for Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
"We now have confirmation of two facts we have known for some time," Frank said. "One, the Federal Reserve system is not a strong advocate for consumers, and two, there is no Santa Claus. People who are surprised by the one are presumably surprised by the other."
Source: USA Today, Noelle Knox (12/19/2007)