WASHINGTON — June 27 marked a turning point in the continuing tale of woe in the subprime mortgage market, with federal regulators issuing new rules that go into effect immediately.

The new rules require banks to make more disclosures, limit prepayment penalties (70% of subprime loans made in 2006 imposed these penalties) and the use of “stated income” loans (for which borrowers’ income is not verified, and 50% of subprime loans in 2006 were made on undocumented income) and also give borrowers a complete picture of the life of the loan. Left out is a “suitability standard” to make sure the consumer gets the best loan for their situation.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2025 ALM Global, LLC. All Rights Reserved.