Ability to Repay - Mortgages
Written by Steve Van Beek
On Tuesday, Raj Date of the CFPB gave another speech and this time hinted at the CFPB's timetable for finalizing one of the many proposed amendments to Regulation Z. Â This one relates to the requirement for lenders to consider the "ability to repay" on mortgage loans. Â Here is from the speech:
"But on the origination front, the CFPB acquired the Federal ReserveâÂÂs proposed rule addressing lendersâ duty to determine that consumers have a reasonable ability to repay mortgages. WeâÂÂre in the process of carefully reviewing the comments that have been received on the proposal. And we plan to issue a final rule early next year in order to provide clarity to the market as quickly as we can, without sacrificing the quality of our analysis." (emphasis added).
As mentioned, the original proposed rule came from the Federal Reserve (NAFCU's Reg Alert is 11-EA-15). Â However, the CFPB took over rulemaking authority for Regulation Z after July 21, 2011.
Dodd-Frank gave the CFPB the authority to finalize rules that were initially proposed by other regulators - including the Federal Reserve. Â The language of Mr. Date's speech indicates the CFPB does not plan to repropose this amendment and plans to finalize the Fed's proposal after reviewing the comments.Â