Amendments to the 2013 Mortgage Rules Under the Truth in Lending Act (Regulation Z)

Summary

 

· The CFPB is proposing to provide an alternative definition of the term “small servicer,” that would apply to some nonprofit entities that service for a fee loans on behalf of other nonprofit chapters of the same organization;

· The CFPB is also proposing to amend the Regulation Z ability-to-repay requirements to provide that some interest-free, contingent subordinate liens originated by nonprofit creditors will not be counted toward the 200 mortgage loan credit extension limit that applies to the nonprofit exemption from the ability-to-repay requirements;

· The proposed rule would provide a limited, post-consummation cure mechanism for loans that are originated with the good faith expectation of qualified mortgage (QM) status but that actually exceed the points and fees limit for QMs.

· The CFPB is seeking comments on whether and how to provide a limited, post-consummation cure or correction provision for loans that are originated with a good faith expectation of QM status, but that actually exceed the 43% debt-to-income (DTI) ratio limit that applies to certain QMs; and

· The CFPB is seeking feedback and data from smaller creditors regarding implementation of certain provisions of the 2013 mortgage rules that are tailored to account for small creditor operations and how their origination activities have changed in light of the new rules.

Comments are due to the CFPB on Sections 1026.41(e)(4), 1026.43(a)(3), and 1026.43(e)(3) on June 5, 2014. Comments regarding correction or cure of DTI ratios and the credit extension limit for the small creditor definition are due on July 7, 2014. All comments may be filed directly with www.regulations.gov, identified by docket number CFPB-2014-0009. Comments may also be mailed or hand delivered to Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G. Street, NW, Washington, D.C. 20552. Please submit comments to CUNA by May 30, 2014.

For more information about this proposed rule, contact CUNA Deputy General Counsel Mary Dunn or Associate General Counsel Jared Ihrig.

Click here for the proposal.