The recently proposed federal subprime lending guidance reminds lenders that they should help consumers make informed choices and not steer them into 2/28 adjustable-rate mortgages when they might qualify for another product, according to Office of Thrift Supervision Director John Reich.It is an "inappropriate practice" to steer consumers into 2/28s with one-sided product descriptions that present the benefits without describing the risks, Mr. Reich told a National Community Reinvestment Coalition conference. (A 2/28 ARM is a 30-year mortgage that has a fixed rate for the first two years.) The comment period on the proposed guidance ends May 7. The thrift regulator also told the community activists that his agency is about to issue a final rule that realigns OTS's Community Reinvestment Act regulation with those of the other federal banking agencies. "We are making these revisions to our CRA rule to promote consistency and help facilitate objective evaluations of CRA performance across the banking and thrift industries," Mr. Reich said.

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