ARLINGTON, Va. — NAFCU has sent the Federal Reserve Board its comment letter in response to the agency's request for written comment on the home equity lending market and in anticipation of the board's plans to hold public hearings on home equity lending and the adequacy of existing regulatory and legislative provisions in protecting consumers.

Concerning predatory lending practices, the board solicited comment about whether access to credit has been reduced as a result of laws enacted to curtail abusive lending. In its letter, NAFCU wrote that the Federal Credit Union Act and NCUA rules and regulations "limit the maximum interest rate federal credit unions can charge on loans and lines of credit," and that "federal credit unions are also prohibited from charging prepayment penalties."

NAFCU President/CEO Fred Becker wrote, "NAFCU believes that while consumers should be protected from predatory lending practices, access to legitimate subprime credit must be preserved to ensure that affordable credit is available to those underserved individuals who are most in need of financial services. In its review of Regulation Z and the HOEPA regulations, NAFCU urges the Board to be cognizant of the importance of providing underserved markets with access to credit, and to avoid any action which might adversely affect credit availability."