A minimum credit score would not cap or regulate risk, or even measure it consistently. Instead it would ensure that the risk floor for QRMs would actually fluctuate.
If I came across a borrower who is deep in debt and whose obligations exceed their income and yet continues to borrow to service those obligations, I would not consider them a good risk.
The agency's final rule contains glaring legal errors and whitewashes the role preemption played in enabling the lending excesses that precipitated the crisis.
In attempting to prevent abuses of the interchange cap exemption for reloadable prepaid cards, the Fed may have inadvertently scuttled an opportunity for banks to serve low-balance account holders.
As we say in New York, the new agency is going to be a first-class "noodge" - pushing and cajoling the industry to simplify, clarify and and modify some of its practices.
