In response to current predatory lending practices and the varying state laws that have been promulgated regarding the problem, newcomer Dominion Bond Rating Services (DBRS) recently released rating criteria to address these issues.

An important feature in DBRS' criteria is how the rating agency considers different jurisdictions in determining the severity of potential liability of the holder of a high-cost loan. Taking into account jurisdictional differences makes the criteria "more exact, since the market will have a better sense of what the potential liability could be for investors," said Michael Nelson, senior vice president at DBRS.

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