CFPB: Re-Opening "Ability-to-Repay"


On June 5, 2012, the Consumer Financial Protection Bureau (Bureau) announced that it is "reopening the comment period" for the proposed rule, issued on May 11, 2011 by the Federal Reserve Board (Board), addressing the new ability-to-repay requirements that generally will apply to consumer credit transactions secured by a dwelling and the definition of a "qualified mortgage."

The ability-to-repay requirements were set forth in the May 11, 2011 proposal to amend Regulation Z (the implementing regulation of the Truth in Lending Act (TILA) to implement amendments to TILA made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Since then, pursuant to Dodd-Frank, the Board's rulemaking authority for TILA was transferred to the Bureau as of July 21, 2011. The original comment period to the proposed rule closed on July 22, 2011.

The Bureau is reopening the comment period until July 9, 2012 to seek comment specifically on certain new data and information submitted during or obtained after the close of the original comment period.

I have written extensively about the ability-to-repay. And I would urge you to read some of these articles to become familiar with these important requirements:

-Ability-to-Repay: Regulating or Underwriting? Part I

-Ability-to-Repay: Regulating or Underwriting? Part II

-Ability-to-Repay: The Basics and a Chart

-Ability-to-Repay: The Chart

-Ability-to-Repay: Additional Analysis

-FRB: Proposes Rule - Ability-to-Repay




-New Data

-Questions and Comments

-Litigation and Liability


-Litigants and Complaints

-Outcomes from Litigation

-Factors or Costs

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