November 14, 2005 News Archive

Governor Olson on Fair Lending and HMDA Data
The reporting of pricing information under the Home Mortgage Disclosure Act should improve the efficiency of the mortgage market and help regulators identify potential fair lending issues in institutions, Governor Mark Olson told a meeting of the Consumer Bankers Association on Monday. Olson said the 2004 data found substantial disparities among racial and ethnic groups in the incidence of receiving higher-priced loans. While the disparities may narrow when information about credit scores, loan-to-value ratios, and other credit-related factors are considered, he said not all disparities may be erased. The data showed that blacks and Hispanics are much more likely than whites to obtain credit from institutions that concentrate more of their business on higher-priced loans. Using the new HMDA information, lenders and community groups will be able work together to identify the particular segments of their communities that may need additional financial education or, perhaps, new , more-competitive products, Olson said.

Examination Treatment of Assets Related to the Tobacco Transition Payment Program
SR Letter 05-21 provides guidance to examiners regarding the proper treatment of assignments of tobacco transition payments and successor-in-interest contract payments under the U.S. Department of Agriculture's (USDA) Tobacco Transition Payment Program (TTPP or Tobacco Buyout Program). The guidance focuses on the areas of risk management, regulatory reporting and capital. The Tobacco Reform Act established the TTPP and permanently ended the federal tobacco marketing quota and price support loan programs. To facilitate the transition of tobacco farmers from subsidized farming to an open market, the USDA will oversee the disbursement of approximately $9.6 billion in Tobacco Buyout Program payments to eligible beneficiaries.

Senior Loan Officer Opinion Survey on Bank Lending Practices
The Board has released the October 2005 Senior Loan Officer Opinion Survey on Bank Lending Practices. The survey, based on responses from fifty-seven domestic banks and nineteen foreign banking organizations, addressed changes in the supply of, and demand for, bank loans to businesses and households over the past three months.