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Wednesday, July 24, 2013

ABA Comments on CFPB Mortgage Rules' Revisions, Requests Delay

In light of ongoing revisions to the Consumer Financial Protection Bureau’s mortgage rules, ABA continues to advocate a delay in the rules’ January effective date. “The CFPB’s rules and commentary continue to evolve in very fundamental ways,” ABA said in comment letters Monday. “ABA believes that a limited delay of the effective date of these rules is the only option that assures an orderly transition to the new mortgage regulatory structure.”

Responding to the CFPB’s July 2 proposed revisions to the loan originator rule, ABA said the current rules on which bank staff qualify are “confounding and extremely challenging to apply in the real world.” It also requested clarity on the inclusion of third-party charges in the points and fees test.

ABA urged the bureau to adopt LO definitions under the 2008 SAFE Act. It also requested that the effective date for LO compensation provisions apply to transactions consummated or paid on or after Jan. 1.

Finally, ABA expressed support -- with modifications -- for the proposal to define “financing” as covering the right to defer payment of a credit insurance premium or fee owed by the consumer beyond the month or period in which the premium is due, a change advocated by ABA’s American Bankers Insurance Association subsidiary.

In a separate letter responding to revisions on the servicing rule, ABA recommended redefining the 120-day rule’s “first notice or filing” standard to align with state laws related to foreclosure proceedings, expanding exceptions to the 120-day foreclosure ban, clarifying a servicer’s obligations regarding incomplete loss-mitigation applications and expanding the period for short-term forbearance.

Read the loan originator comment letter.

Read the servicing comment letter.

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