ABA believes that the overly stringent Dodd Frank Act prohibitions that ban borrowers’ options to pay upfront points and origination fees to creditors will greatly damage the availability of financing alternatives for consumers. ABA therefore supports the Bureau’s efforts to create alternative compliance options so that creditors can continue to offer diverse financing choices to all segments of the market.In the comment letter ABA stresses that the proposed “0-0 Alternative” loan option, where lenders must offer loans that include no discount points or origination points or fees, will not be a viable option for most banks. As an alternative, ABA suggests constructing a loan option following two general principles—it should be disclosed to the consumer together with the 3-day RESPA-TILA disclosures, and should present the consumer with an option for lower points and fees.
In addition, ABA requested that the CFPB add additional clarifications to better delineate the functions that managers may engage in without crossing the definitional lines of “loan originator;” that the de minimis loan exemption provisions be increased to 15 or fewer transactions; and that the CFPB adopt a clear and comprehensive list of allowable activities under the “proxy” rule.
Read the full comment letter.
Read the proposed rule.