Highlights:

• The two proposed illustrations are intended to assist institutions in providing consumer information as discussed in the Consumer Protection Principles portion of the interagency Subprime Statement.
• The illustrations include a narrative explanation of some of the key features of certain adjustable rate mortgage (ARM) loans identified in the Subprime Statement, and a chart with numerical examples designed to show the potential consequences of payment shock for an ARM loan structured with a discounted interest rate for the first two years.
• Use of the illustrations by institutions is optional.
• The agencies are requesting comment on the usefulness of the two proposed illustrations to institutions considering implementing the consumer protection portion of the Subprime Statement.

Distribution:
FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:
Chief Executive Officer; Chief Compliance Officer

Related Topics:
Statement on Subprime Mortgage Lending; Interagency
Guidelines for Real Estate Lending; Interagency Guidelines
on Subprime Lending; Expanded Examination Guidance
for Subprime Lending Programs; Interagency Guidance on
Nontraditional Mortgage Product Risks; and Unfair and
Deceptive Acts and Practices by State-Chartered Banks

Attachment:
Proposed Illustrations - PDF Help

Contacts:
Victoria Pawelski, Policy Analyst, at vpawelski@fdic.gov or (202) 898-3571; Mira Marshall, Acting Chief, CRA/Fair Lending Section, at mmarshall@fdic.gov or (202) 898-3912;
or Richard Foley, Counsel, at rfoley@fdic.gov or (202) 898-3784

Printable Format:
FIL-67-2007 - PDF 34k (PDF Help)

Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2007/index.html.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.