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New York Fed begins purchasing mortgage-backed securities

National Mortgage Professional
Jan 05, 2009

Leading national minority oanizations vw to fix Fed's new UDAP ruleMortgagePress.comCitizens for Equal Access to Credit, UDAP, Federal Reserve Board, Javier Cuebas Citizens for Equal Access to Credit (CEAC), a diverse, mult-icultural, non-profit coalition comprised of national organizations representing minorities, small business advocates, local elected officials, credit customers and leading issuers of low limit credit cards has expressed concern about aspects of the UDAP rule recently made public by the Federal Reserve Board. The rule would prohibit card issuers from financing during the first year security deposits or fees for the issuance or availability of credit if those deposits or fees, in the aggregate, utilize the majority of the available credit on the account at account opening. In addition, security deposits and fees exceeding 25 percent of the credit limit would have to be spread out over six months and, therefore, could not be posted to the account during the month the account is opened. "Over 70 million people in the U.S. do not have a credit score that would allow them to qualify for a prime credit card and today's rule could leave them with no options to safely improve their credit score," said Javier Cuebas, executive director of CEAC. "Until the Fed or Congress addresses the real world impact of the pricing aspect of the UDAP rule, millions of people from underserved communities that this rule is intended to help, may suffer significant harm." Over the past year, CEAC and its partners provided economic data and guidance to the Fed as it worked to finalize the UDAP rule. Nearly one third of the 62,000 letters to the Fed expressed opposition to the fee cap provision. An independent study found that over 4.3 million people improved their credit scores using low limit cards in the last year alone. "It is essential that we work to find alternatives that will protect both consumers while ensuring that credit is safely available to the underserved, particularly during these difficult times," added Cuebas. "Our members remain committed to working with Congress and the agencies to build a consensus solution to this important problem and the month phase-in period will give us the opportunity to do so." For more information, visit www.equalaccesstocredit.org.
Published
Jan 05, 2009
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