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Tuesday, June 25, 2013

CFPB Proposes Revisions, Clarifications to Mortgage Rules

The Consumer Financial Protection Bureau yesterday proposed several revisions to the mortgage rules taking effect in January 2014. The changes include provisions related to loan origination, rural and underserved areas, thresholds for points and fees and servicing.

The proposal clarifies that monthly insurance premium structures are not covered by the loan originator compensation rule’s ban on financed premiums. ABIA and ABA had objected to language in the preamble of the bureau’s final rule suggesting that pay-as-you-go premiums were covered, and they were instrumental in persuading the bureau to propose this fix.

The proposal also clarifies that tellers and other staff should not be considered loan originators “for merely providing loan originator or creditor contact information to the consumer," provided that the person does not discuss particular credit terms and does not "direct the consumer based on an assessment of the consumer’s financial characteristics." This is a significant change that ABA has advocated.

The CFPB also proposed revisions to two exceptions to small creditors operating in predominantly “rural” or “underserved” areas while the bureau re-examines the underlying definitions of “rural” or “underserved” over the next two years.

Comments on the latest round of revisions are due July 22.

Read more. 

Read the proposed rule.