Moreover, the easing of underwriting standards and the marketing of these products to a wider spectrum of borrowers held the potential to create larger risks. In 2006, the Federal Reserve and the other banking agencies issued guidance on nontraditional mortgage products to address these concerns.
The FSC is the new regulator of credit unions and all financial institutions other than banks, finance companies and trust companies. The FSC oversees credit unions to ensure that their operations are satisfactory, and that they are lending prudently. All credit unions report regularly to the FSC, which also carries out physical inspections from time to time.