To allow compliance with FDIC’s large-bank pricing rule, and, in particular, the subprime loan reporting requirements that go into effect Oct. 1, Experian will allow its banking clients to use credit attributes combined with Experian’s Debt-to-Income Insight model for consolidated delivery of the necessary reporting requirements on subprime loans. Clients should, of course, review their particular reporting requirements with their own legal and regulatory compliance specialists.

The new reporting requirements for large banks (those having more than $10 billion in assets) define a subprime loan as a revolving or installment loan having one or more of the following characteristics:

•    Two or more 30-day delinquencies in the past 12 months or one or more 60-day delinquencies in the past 24 months.

•    Judgment, foreclosure, repossession, or charge-off in the prior 24 months.

•    Bankruptcy in the past five years; or debt service-to-income ratio of 50% or greater or otherwise limited ability to cover family living expenses after deducting total monthly debt-service requirements from monthly income.

“When this new regulation goes into effect, the composition of a bank’s assets will directly impact its FDIC rates. This is a departure from the current environment where deposit insurance rates are charged based on the size of deposits. This means that banks with higher-risk subprime loan amounts may be charged higher FDIC insurance rates,” said Michele Pearson, vice-president, Consumer Information Services, Experian.

http://press.experian.com/United-States/Press-Release/experian-offers-services-for-large-banks-in-response-to-new-regulatory-requirements.aspx