The scheduled release of the new Home Mortgage Disclosure Act data next year presents severe reputational risk for subprime lenders, and the Federal Reserve Board needs to prevent the misuse of the data, according to the American Financial Services Association."We are hopeful that the Board will do everything in its power to prevent the misuse of the data, up to and including public denunciations of subprime industry detractors who attempt to equate risk-based pricing with race discrimination," the AFSA says in a comment letter. The release of the 2004 HMDA data in the summer of 2005 will include pricing information on subprime loans for the first time. But it does not include data that will relate price to the actual risk of the loans. "We believe that this shortfall will permit industry detractors to draw erroneous conclusions concerning risk-based pricing of loans," the trade group contends. The AFSA is recommending that the Fed include a disclosure with the HMDA data that says the information "does not include several factors that are integral in determining the price of a loan."

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