The Office of Thrift Supervision is seeking public comment on what approach it should take in issuing a regulation that addresses "unfair and deceptive" subprime lending practices.The 22-page advance notice of proposed rulemaking contains a list of "targeted practices," such as loan flipping and overages that the OTS might prohibit as part of a regulation on unfair and deceptive acts and practices (UDAP). The OTS also points out that the regulation could take a principles-based approach or prohibit specific practices (as the North Carolina predatory-lending law does). "The ANPR reviews OTS legal authority for issuing a UDAP regulation and discusses various approaches that the agency could take, either individually or in conjunction with other initiatives, in issuing a regulation," the agency said. The OTS is issuing the proposal for a 90-day comment period. OTS Director John Reich directed his staff to draft the UDAP proposal after concluding that Congress wants the regulators to exercise all their authorities to stop abusive lending practices.

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