The top Federal Reserve Board official overseeing consumer affairs expressed support for legislation to overhaul mortgage lending rules Wednesday, but advocated some legal protections for lenders, among other changes.
In testimony before a House panel, Saundra F. Braunstein, the Fed's director of consumer and community affairs, praised a House-passed bill to curb subprime lending abuses, saying it helped the central bank revamp its own rules.
She advocated a few modifications, however, including adding language to shield from litigation those mortgage lenders that comply with certain standards. "Because these standards are broad and originators would be liable for violations, we believe the establishment of clearly defined safe harbors may be appropriate in implementing the law," Braunstein said in testimony before the House Financial Services Committee's subcommittee on financial institutions and commercial credit.
