As predatory lending and the subprime market become negatively associated with each other, legitimate subprime practices are left to suffer. However, the Office of Thrift Supervision is beginning to take steps to help regulate the subprime industry by stifling predatory lending practices without harming the subprime market.
In an advanced notice of proposed rulemaking (ANPR) published by the OTS, the office has set up a public comment period in which it will be looking into what they call alternative mortgage lending. "Part of it is all of us trying to get a handle on what's the most effective way of dealing with predatory lending while not unnecessarily chilling legitimate subprime lending," said Deborah Dakin, deputy chief counsel for regulations and legislation for the OTS. "It may turn out that what one needs is not regulatory, but a legislative change, or that it could be that some things may be best done through consumer education or examination."