ABIA and ABA last week expressed support for the Consumer Financial Protection Bureau’s proposal to delay a section of its loan originator compensation rule that would prohibit the financing of single-premium credit insurance offered in connection with residential mortgages.
The bureau proposed the delay after ABIA flagged issues with language included in the preamble of the final rule. While the original proposal would have barred, as of June 1, adding a lump-sum premium to a mortgage loan amount at closing, the final rule’s preamble included other more common premium structures in the prohibition.
ABIA, ABA, and six other trade groups in a comment letter last Thursday noted that monthly paid premiums are commonly sold by banks, and that it would be challenging if not impossible to unwind such programs by June 1. They added they did not believe the prohibition should apply to monthly premium structures, but that if the bureau decided to bar them anyway, banks would need an additional year to comply.
Read the letter