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New ability-to-pay comment process may be burdensome CUNA
WASHINGTON (6/8/12)--The Consumer Financial Protection Bureau recently re-opened the comment period for a proposed ability-to-repay rule to collect specific data and information on mortgage lending underwriting criteria and loan performance, but the Credit Union National Association (CUNA) in a new comment call warned this and other information sought by the bureau "is highly technical and may be very difficult and time consuming for credit unions to provide."

The CFPB's ability-to-repay rule comment deadline was extended to July 9 after new mortgage data came to light, the CFPB explained. Agency director Richard Cordray said the sheer volume of comments the agency has received regarding the issue also contributed to the decision to extend the comment period.

For the new comment round, the CFPB has expanded its request for information and has asked for data on estimates of litigation costs and liability risks associated with claims alleging an ability-to-repay requirements violation, for both qualified and non-qualified mortgage loans. However, CUNA in the comment call noted that responses to questions regarding possible litigation would be speculative at best.

CUNA has weighed in with the CFPB to let the bureau know that providing responses to this request for comments will be extraordinarily burdensome. However, credit unions that wish to forward their comments to CUNA may do so until July 2. (For the CUNA comment call, use the resource link)

The CFPB has said the new data and public comments could change how it designs the final rule.

Under the still-developing CFPB rule, mortgage originators would be required to consider a homebuyer's ability to repay a loan before a loan could be offered. The CFPB's ability-to-repay requirements would apply to consumer credit transactions that are secured by a dwelling and be further defined by the agency's definition of a qualified mortgage (QM).

A final version of a QM rule was scheduled to be released this summer, but the CFPB has also pushed that date back—likely to late this year.

The ability-to-repay rule was one of many topics discussed at a Wednesday Senate Banking Committee hearing on Dodd-Frank Wall Street Reform Act implementation.

Cordray testified on a panel with Deputy U.S. Treasury Secretary Neal Wolin, Federal Reserve Governor Daniel Tarullo, Comptroller of the Currency Thomas Curry, and Acting Federal Deposit Insurance Corporation Chairman Martin Gruenberg.

Cordray said the CFPB would not convene a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel before the ability-to-repay rule is issued. However, he did encourage concerned small businesses to contact the CFPB directly with their comments.

Under certain circumstances,  the CFPB is required to hold SBREFA panels to gauge the potential impact that upcoming regulations could have on small businesses, but Cordray noted Wednesday that a panel would not be held in this case, as the rule was a Federal Reserve project at first.

A new qualified residential mortgage (QRM) definition, and accompanying rules, was also discussed, but federal regulators on Wednesday said they would wait for the CFPB to complete its ability-to-repay work before they moved forward on the QRM rulemaking.


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