Oct. 23, 2006 News Archive

SR 06-15/CA 06-12: Interagency Guidance on Nontraditional Mortgage Product Risks
On Sept. 29, 2006, the federal financial institutions regulatory agencies issued Interagency Guidance on Nontraditional Mortgage Product Risks. This guidance addresses both risk management and consumer disclosure practices that institutions should employ to effectively assess and manage the risks associated with residential mortgage loans that allow borrowers to defer repayment of principal and sometimes interest. The agencies also issued an addendum to the 2005 Interagency Credit Risk Management Guidance for Home Equity Lending to provide additional guidance to regulated institutions on consumer disclosure practices for open-end home equity lines of credit that contain interest only features.

Latest Beige Book Released
Reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand since the September report. Four Districts reported that economic growth firmed while a couple of Districts noted that growth cooled. Other reports generally characterized growth as moderate or mixed. Details, including individual Reserve Bank summaries, are available in the full report.

Board Amends Reg D, Annual Adjustments for Reserve Calculations and Deposit Reporting
In a press release, the Board announced that it has raised its threshold levels for required-reserve balances next year as part of its annual adjustment of reserve requirements.