Federal regulators directed banks on Friday to properly explain the risks posed to borrowers from interest-only and other nontraditional mortgages.
The guidance was aimed at addressing the fear that consumers don’t understand all the repayment risks involved in these mortgages, including rising interest rates which could greatly increase their monthly payments.
The regulators said that banks needed to make sure that the loans they made were “consistent with prudent lending practices, including consideration of a borrower’s repayment capacity.”
The new guidance will be used as a benchmark for audits of banks’ operating procedures performed by the regulatory agencies.
A380 delay still being studied
Customers and investors hoping for word from Airbus parent EADS about delays to the flagship A380 jet program, which is already running one year behind schedule, will have to wait longer.
The EADS board, which met Friday to discuss the A380, ended the forum without announcing a decision.
“The board of directors will continue this discussion in the near future,” said a statement from the European Aeronautic Defence and Space Co., which owns 80 percent of Airbus. It gave no further details about the talks
EADS confirmed last week that deliveries of the 555-seater superjumbo will be pushed back a third time, but gave no new timetable.
Phone companies urge pretext ban
Executives from the nation’s largest wireless telephone companies told lawmakers Friday they should outlaw the practice of lying to get access to someone else’s phone records – also known as pretexting.
On the second day of testimony over the spying scandal that has embroiled the Hewlett-Packard Co., a House Energy and Commerce subcommittee asked the six executives to defend how they safeguard their customers’ private billing information.
The nearly three-hour hearing followed Thursday’s session at which Hewlett-Packard’s top executives were grilled about their roles in the scandal. Many invoked their Fifth Amendment rights against self incrimination.
At Friday’s hearing only one witness, Doug Atkin, owner of Anglo-American Investigations Inc., invoked his right to refuse to testify.
Wendy’s finishes Hortons spinoff
Tim Hortons became an independent company Friday as parent Wendy’s International Inc. completed its spinoff of the Canadian coffee-and-doughnut chain.
Wendy’s, the third-largest hamburger chain in the U.S., distributed to its shareholders the remaining 160 million shares, or 83 percent, of Tim Hortons that it held. The other shares were sold in an initial public offering in March.
Wendy’s shareholders received 1.35 shares of Tim Hortons for every Wendy’s share they owned on Sept. 15.