Home Ownership
Public Hearings on Home Ownership and Equity Protection Act
The Transcript
"The Board will hold public hearings as required by the Home Ownership and Equity Protection Act (HOEPA) to examine the home equity lending market, and to assess the effectiveness of existing regulatory and legislative provisions (including HOEPA) in protecting the interests of consumers"
June 7, 2006 --Federal Reserve Bank of Chicago ----Transcript
GOVERNOR OLSON: It's 8:30, we can get started. I suspect that people will be drifting in and out over the course of the day, but we are looking forward to a very full and free discussion as these issues always tend to generate. Time is precious, so we will want to get started. I'm Mark Olson from the Federal Reserve Board in Washington DC. We have a couple Fed colleagues with me this morning. Leonard Chanin, who is Associate Director of the Consumer and Community Affairs. Sandra Braunstein, the Director of Community Affairs. We have Paulette Myrie-Hodge, from Supervision and Regulation here in Chicago. And it may appear that we are playing tricks on you, but Alicia Williams -- Alicia, will you identify yourself -- also with the Consumer Affairs here in Chicago, will be part of our panel.
Welcome, Diane. I was just commenting that we will be introducing the panelists in a moment. There are a couple of rules that we have instituted. As you know, in Washington DC, the House of Representatives is a large, very diverse group. Let me back up. The Senate. The Senate thinks of itself as a group that does not need to have a great deal of rules. They think of themselves as exclusively gentlemen and gentlewomen and not in need of a great deal of rules. So chaos tends to prevail in the Senate.
The House is under no illusion. So they have a lot of rules, and it seems to run a lot better. We are sort of half way between here. We've decided the rules make a certain amount of sense. In part because we want to make sure that the time is well used, and in significant part because at the end of the program today is when we have our open mike to allow people who are not on the panels to have a chance to speak.
So for our panel members this morning, we are going to ask each of them to have an opening statement. And the opening statement will be five minutes, which will be timed by the two timekeepers sitting right out in front, so you can watch carefully how that time goes.
When you are speaking on issues that you're familiar with and that you feel strongly about, five minutes goes very quickly. And I know that from personal experience and I know that from watching. So it is not that we think that you're abusive of time privileges, it's just that we think we are being respectful.
This first panel will go from 9:00 to 10:30. We may get started earlier, and if we get started earlier, that's just fine. But then we will take a break. We will have a second panel. We will then break for lunch and have a third. Then at 3:00 o'clock without fail we will leave that hour for comments from people from the audience. Those of you who would care to speak, that will be a three minute time opportunity. It will also be timed. And we ask that you sign in. Now, where are they -- who is accommodating --
MS. BRAUNSTEIN: It's outside of the room.
GOVERNOR OLSON: It's outside the room. If you care to speak during that time, we'll do some other reminders, but if you care to speak during that time please sign in and we will then recognize you for that purpose. Are there any other house rules that we need to talk about before we move on?
MS. BRAUNSTEIN: Maybe just how this little timer works here.
GOVERNOR OLSON: A yellow light comes on when it's two, and then the red light comes on at five and you're done, okay.
The HOEPA hearings are a continuation. Actually, four years ago was the last time that the HOEPA hearings were held. And in that four years it's hard to imagine that as much change could have taken place in the industry as has taken place. And so we are going to be doing a series of four HOEPA hearings now around the country. The purpose of the hearings are threefold. The first purpose of the hearing is to have a determination of the extent to which the HOEPA regs that were passed in '02, were put in place in '02, are effective. And we will be hearing from a number of groups about that.
The second purpose of it is to look at the growth of the nontraditional loan product. The nontraditional loan product is certainly the most significant change that has taken place in the marketplace during that interim period, and it has raised some real issues with respect to the mortgage industry. It has certainly allowed for a great deal of flexibility and has brought a lot more dollars into the home loan market. But it has also raised some fundamental issues. So that is an issue that we will want to look at carefully.
The third thing that we want to talk about is the channels the mortgage product is delivering, because that is a very significant issue. And as the mortgage product continues to grow and as there are more players in the marketplace, that is a significant change that we will want to take into consideration.
The rest of the Transcript is in pdf format.
We have posted the entire Transcript for those interested in learning more about Mortgages, Credit and Lending Regulations.
June 7, 2006 --Federal Reserve Bank of Chicago
June 9, 2006--Federal Reserve Bank of Philadelphia
June 16, 2006--Federal Reserve Bank of San Francisco
July 11, 2006--Federal Reserve Bank of Atlanta