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Editors, Reporters:

          America’s Community Bankers has commended federal banking regulators for proposing to streamline and consolidate the Call Report, but has recommended against requiring banks to report on subprime loans using the definition in the proposal.

          In comment letters to the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, ACB said the definition is "very subjective, is open to a number of interpretations and is overly broad. It is conceivable that every institution will interpret it differently."

          ACB said the regulators already have the tools through interagency guidelines to supervise and examine institutions that are involved in subprime lending without additional Call Report data.

          ACB said the proposal did not take into account several factors that must be involved in developing a definition of subprime lending. These include the special use of subprime lending to serve the legitimate unmet needs of communities that involve higher interest rates, fees and points to compensate for stretched underwriting standards.

          Even if a more workable definition were developed, implementing it in the Call Report due March 31, 2001, would not give banks sufficient time to modify systems and operations, ACB said.