In addition to these actions, therefore, the Federal Reserve will exercise its rulemaking authority under the Home Ownership and Equity Protection Act (HOEPA) to address unfair or deceptive mortgage lending practices.
Similarly, if banks found themselves with insufficient balances at the end of the day, they could borrow from us but at OCR plus a penalty rate. By ensuring it was costly for a bank to have insufficient cash and also offering a poor return if settlement balances were too high, it incentivised banks to manage their balances carefully.