February 27, 2006


The Honorable John M. Reich
Director
Office of Thrift Supervision
1700 G Street, N.W.
Washington, D.C. 20552

Dear Director Reich:

America””s Community Bankers is writing to you on behalf of our OTS-regulated members engaged in residential mortgage lending in Montgomery County, Maryland. The Montgomery County Council (“Council”) recently adopted Ordinance 36-04, entitled “Commission on Human Rights Discrimination in Housing” (“Ordinance”), that will take effect on March 7, 2006. We believe that the Ordinance will adversely affect residential mortgage lending in Montgomery County and respectfully request that the OTS formally review the Ordinance for consistency with federal law.

ACB is committed to ensuring that all Americans have fair and equitable access to credit and that consumers have the necessary skills to make wise credit and other financial decisions. ACB supports the development of national, anti-predatory lending standards to create uniformity and ensure consistency among locality-based mortgage lending initiatives.

Although the Montgomery County Ordinance has been codified under the Consumer Protection, and Human Rights and Civil Liberties chapters of the Montgomery County Code, the legislative history clearly shows that the purpose of the Ordinance is to regulate lending practices in Montgomery County in an effort to curb predatory lending. The Maryland State legislature adopted several anti-predatory lending measures in 2002.

Lenders and investors have raised concern that the Ordinance will not achieve its goal because the language is vague and ill-defined, yet imposes severe penalties for any violation. The concern is that a lender or investor will be subject to liability without being able to determine what loans would be considered “discriminatory” under the Ordinance.

The American Financial Services Association and seven mortgage lenders have filed suit to invalidate the Ordinance. Just last week, Lehman Brothers”” Aurora Loan Services LLC announced that it would not purchase loans originated in Montgomery County, citing concerns about vague requirements, excessive penalties, and potentially unlimited liability. We understand that Bear Stearns made a similar announcement. Thus, the effect of the Ordinance would appear to be to curtail legitimately supplied credit to the borrowers about which the Council is most concerned.

Based on the above, ACB urges the OTS to review the Ordinance””s effect on OTS-regulated institutions and to take appropriate action.


Sincerely

Robert R. Davis
Executive Vice President and
Managing Director, Government Relations