While the proposed guidance focuses on banks' ability to adequately identify, measure, monitor, and  1  4  U.S. Money Laundering Threat Assessment Released  BIS Review 26/2006  control the risk associated with these products, it also addresses consumer protection.
Nontraditional mortgages, including "interest-only" mortgages and "payment-option" adjustable-rate mortgages, have been available for many years, and are beneficial for some borrowers because of the payment flexibility they offer. Although these products were initially designed for higher-income borrowers, today these products are being offered to a wider spectrum of consumers, including borrowers for whom these types of mortgages may be ill-suited.