With hundreds of thousands of people losing their homes to foreclosure, the Federal Reserve on Tuesday proposed regulations to combat predatory lending.
The new rules would only affect future mortgages, and some say that's too little too late. Critics of the Fed say it has been slow to address problems in the sub-prime mortgage market.
The Federal Reserve has a broader power than any other regulator to ban unfair or deceptive mortgage lending, but it has never used that authority. And for a long time, there were signs that the wheels were coming off the train in the mortgage business.
Deborah Goldstein, vice president at the Center for Responsible Lending, says many of the rules sound good, but big loopholes could allow unscrupulous lenders to keep making deceptive, unfair loans. The American Bankers Association has the opposite take — saying the regulations are good so long as the enforcement isn't overzealous.