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Subject: Reverse Mortgages
Date: August 16, 2010
To: Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, and All Examining Personnel
Description: Interagency Guidance
The guidance attached to this bulletin continues to apply to federal savings associations.
The Federal Financial Institutions Examination Council (FFIEC) has announced the release of final guidance on reverse mortgage products. The reverse mortgage guidance was developed and issued by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision, and National Credit Union Administration, in conjunction with the State Liaison Committee of the FFIEC. National banks are expected to use the guidance in their efforts to ensure that their risk management and consumer protection practices adequately address the compliance and reputation risks raised by reverse mortgage lending.
The guidance addresses the general features of reverse mortgage products, relevant legal requirements, and consumer protection concerns. It focuses on the need for banks, thrifts, and credit unions to provide clear and balanced information to consumers about the risks and benefits of these products. Such information should be provided while consumers are making decisions about these products and should address the specific matters listed in the guidance, including informing consumers of available alternatives to reverse mortgages. In addition, institutions should require that consumers receive qualified independent counseling and take steps to avoid any appearance of a conflict of interest. The reverse mortgage guidance also addresses related policies, procedures, internal controls, and third-party risk management.
The reverse mortgage guidance is effective 60 days after publication in the Federal Register, which is expected shortly. The final guidance is attached.
If you have questions, please contact your supervisory office, the Compliance Policy Division at (202) 874-4428, or the Community and Consumer Law Division at (202) 874-5750.
Ann F. Jaedicke