WASHINGTON - Sen. Tim Johnson said last week that federal bank and thrift regulators have agreed to report to him quarterly on the enforcement of subprime lending guidelines issued in January.
The South Dakota Democrat, who recently took the reins of the Senate Banking Committee's financial institutions subcommittee, said he wants to ensure that the guidelines are not used to target too many institutions and create unintended consequences.
"I am very encouraged by the regulators' willingness to work with my office to quell industry concerns that this guidance will somehow be applied over-broadly," Sen. Johnson said in a press statement. "The regulators have reassured me, both in writing and orally, that this guidance will not affect the vast majority of insured institutions engaged in consumer lending."
The examiner guidelines sparked an outcry in the industry, which worried that they defined subprime loans too broadly and might prompt a credit crunch. But regulators have maintained that the guidelines apply only to about 150 companies that have large, targeted, subprime lending programs.