Greenspan Targets Unfair Lending
Concerned about unfair and deceptive lending practices in the mortgage industry, Federal Reserve Board Chairman Alan Greenspan said yesterday that he has called on a group of federal law enforcers and bank regulators to examine ways to solve the problem.</br></br>Greenspan said officials from the Justice Department, the Department of Housing and Urban Development, the Federal Trade Commission, and six banking and credit-union regulatory agencies, including the Fed, have been meeting informally since October to tackle the practice, called predatory lending. Such lending is believed to be mostly targeted at poor, underserved consumers, especially blacks, Hispanics and other minorities.</br></br>Sources involved with the group said that so far its meetings have focused on gauging the scope of the problem and how best to grapple with it. The group hopes to have some recommendations for its members as well as for Congress by year's end.</br></br>North Carolina last year enacted a law to curb predatory lending, and several other states, including New York, are considering similar steps. But the federal government has been criticized for not doing more.</br></br>For example, according to participants in the group, the Fed itself has not written rules describing what constitutes "unfair and deceptive" mortgage lending practices, even though Congress gave it the authority to do so six years ago in legislation aimed at curbing predatory lending. Some members of Congress think that law has not worked as intended and needs to be strengthened.