OCC Warns Banks on Subprime Lending

The Comptroller of the Currency is raising concerns that national banks engaged in high loan-to-value and subprime lending may fall into the same unscrupulous and risky underwriting practices as their unregulated competitors."Some believe that the entry of regulated commercial banks into the subprime markets and high-LTV market will curb lending practices by supplanting certain unscrupulous lenders who prey on the poor and unsophisticated," Acting Comptroller Julie Williams said. "But competitive pressures must not lead commercial banks to cutthroat, lowest-common-denominator lending," she told a risk management conference sponsored by Robert Morris Associates Monday in Chicago. "If bankers are to be successful in these markets, they must be attentive to the peculiar challenges -- both social and financial -- that they pose," Ms. Williams said.