More heat on subprime lenders

Three federal agencies, led by the Federal Reserve, are teaming up with state regulators to keep a closer watch on lenders with large subprime mortgage operations. Subprime loans are made to borrowers with less than impeccable credit, and predatory and sometimes fraudulent practices in this market have contributed to the surge in foreclosures. The federal and state agencies will select a sample of subprime lenders each regulates and assess credit standards and compliance with federal and state consumer protection laws. They will take enforcement actions if necessary. In addition to the Fed, other partners are Office of Thrift Supervision, Federal Trade Commission, Conference of State Bank Supervisors, and American Association of Residential Mortgage Regulators.