The proposed Regulation Z changes on mortgage lending

I haven’t had a chance to read through the changes the Federal Reserve Board is recommending for Reg Z. (The regulations for the Truth In Lending Act and Home Owner Equity Protection Act) but from the press release there are some good things. Lowering the HOEPA threshold for instance. But the real issue is not so much the rules but the enforcement of them. Last night on NPR a commentator for the banking industry said “The changes are a good step, so long as they aren’t over zealously enforced.”

Anytime I hear industry using the term “over zealous enforcement” I gotta laugh. I would be much happier if the current laws were actually enforced, we can worry about over zealousness when we get there. The other thing that is missing, because in some ways its impossible to legislate is a ethical or moral duty not to steer somebody into a loan that is really a set up for disaster. Why is an elderly person on a fixed income, being steered into an adjustable rate mortgage with a teaser rate that they can barely afford?