Board of Governors of the Federal Reserve System

Regulators Release Guidance on Private Student Loans With Graduated Repayment Terms at Origination

On January 29, the federal financial regulatory agencies (the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency), in partnership with the State Liaison Committee (SLC) of the Federal Financial Institutions Examination Council, issued guidance for financial institutions on private student loans with graduated repayment terms at origination.

This guidance provides principles that financial institutions should consider in their policies and procedures for originating private student loans with graduated repayment terms which are structured to provide for lower initial monthly payments that gradually increase.  The Agencies issued this guidance because they recognize that the competitive job market, traditionally low entry-level salaries, and higher student debt loads can contribute to some borrowers preferring greater flexibility with their payments as they transition into the labor market.  Press ReleasePublished Guidance.

Credit Risk Retention – Joint Regulatory Proposed Rules

On March 28, 2011, the Office of the Comptroller of Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, the Department of Housing and Urban Development and the Federal Housing Finance Agency released a joint notice of proposed rulemaking to implement the credit risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The paper linked below provides an in-depth examination of the proposed rules and their implications for financial markets. Click here to read more.