Subprime Lending

Generally, subprime loans are for people with blemished or limited credit histories. These loans carry a higher rate of interest than prime loans to compensate for the increased risk to the lending institution. To maintain safe and sound operations, the lender should determine whether this risk is acceptable and controllable given its staff, financial condition, size, and level of capital support.

Follow the links on this page to regulatory resources related to subprime lending.


Expanded Guidance for Subprime Lending Programs (OCC 2001-6, January 2001), Interagency Guidance
Applies specifically to institutions with subprime lending programs that are equal to or greater than 25 percent of tier 1 regulatory capital

Federal Financial Regulators Issue Final Illustrations of Consumer Information for Hybrid Adjustable Rate Mortgage Products (NR 2008-57, May 2008), Illustrations
Covers providing information to consumers on hybrid adjustable-rate mortgage products

Subprime Lending Activities (OCC 1999-10, March 1999), Interagency Guidance
Discusses the risks inherent in subprime lending and establishes expectations for proper business planning, risk management, and controls

Subprime Lending: Risks and Rewards (OCC 1999-15, April 1999), Interim Examination Procedures
Discusses the risks and rewards associated with subprime lending and provides supplemental guidance for national banks that make these loans

Subprime Mortgage Lending (OCC 2007-26, July 2007), Final Guidance (Federal Register, July 10, 2007)
Covers "2/28," "3/27," and similar adjustable-rate mortgages that expose borrowers to higher payments once introductory interest rates expire