Consumer Advisory Council to Hold a Meeting this Month
If you understand how the structure of the Federal Reserve works, then you know that the Board of Governors has several advisors. It is coming to the time in the year where the Consumer Advisory Council will meet to discuss issues that pertain to you, the consumer. Later this month, on October 25, 2007, the Consumer Advisory Council will hold an open meeting to discuss to main current issues.
The first issue to be discussed is the Home Ownership and Equity Protection Act (HOEPA). This act, passed by the Federal Trade Commission (FTC) in 1994, was created to detail the rights of borrowers to make use of their home equity. Loans that are covered by the act must meet certain requirements.
The three types of loans that are covered under this act are:
1. The original property mortgage if the APR exceeds eight percentage points on Treasury securities of comparable maturity.
2. A second mortgage if the APR exceeds by more than ten percentage points in Treasury of comparable maturity.
3. All of the fees and payable points at closing; either $510 or eight percent of the total loan, which ever one is larger. Credit insurance in connection with the transaction are also included as fees.
Under HOEPA, the loan amount, the APR, the variable rate, the payment amount and the warnings concerning default are required to be disclosed in written form. All of this information must be given by the closing date.
The Truth in Lending Act (TILA) will also be discussed at the meeting. TILA is under Title I of the Credit Protection Act. It basically states that all key terms of the lending agreement, such as fees, interest rates and penalties, should be disclosed to the consumer/borrower. Credit card practices and dispute procedures are also regulated in this act.
On October 25, 2007, these issues will be brought to the table. With all of the foreclosures, and the plummeting of the subprime lending market, it is time to review consumer rights and see what might be done to help the issue. This will also be an opportunity for the public to speak on these matters. The Federal Reserve Board welcomes comments from the public during the discussion of these issues.
This meeting is open to the public, but registration is required by the 23rd of this month. You can register on the Federal Reserve Website.
