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Monday, September 10, 2012

ABA Expresses Concern About CFPB’s HOEPA Proposal

ABA has expressed extreme concern about the CFPB’s proposal to implement Congress’s expansion of the Home Ownership and Equity Protection Act (HOEPA) with respect to mortgages with high interest rates, fees, or prepayment penalties. In a comment letter ABA EVP Bob Davis said:
We believe that the enormous expansions of HOEPA’s application and coverage have not been properly calibrated, and unleashing them on the market—especially in conjunction with all the other mortgage-related changes—will cause disruptions across all market segments.

We strongly urge that deeper and more careful consideration be given to the proposed rules, and request that the Bureau engage in more analysis of the adverse impact that these rules will have on consumers and lending institutions.
Davis urged the bureau to refrain from expanding the definition of finance charge, which would dramatically alter annual percentage rate calculations and other requirements tied to APR in a manner inconsistent with the bureau's proposed reduction in emphasis of APR in consumer disclosures.

He also listed numerous technical compliance issues that require resolution, and said that a minimum implementation period of 18 to 24 months after the rules are finalized would be needed to establish needed compliance requirements, reprogram bank and vendor systems, and permit staff training.

Read the letter.

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