Most subprime loans were issued by entities outside the supervisory jurisdiction of the Federal Reserve and other federal bank regulators, and consequently, these entities were not subject to examinations to assess  1  See Design and Testing of Effective Truth in Lending Disclosures: Findings from Qualitative Consumer Testing Research, submitted to the Federal Reserve Board of Governors by Macro International, Inc. (December 15, 2008), and Design and Testing of Effective Truth in Lending Disclosures: Findings from Experimental Study, submitted to the Federal Reserve Board by Macro International, Inc. (December 15, 2008).
BIS Review 91/2009  5  compliance with federal consumer protection laws. We believe, therefore, that it is appropriate for Congress to consider, as part of regulatory reform, a strengthened supervisory and enforcement scheme, in partnership with state regulators and enforcement officials, for closing the regulatory gap with respect to independent nonbank lenders.