Alternative Mortgage Transaction Parity Act (Interim Rule)


On July 22, 2011, the Bureau of Consumer Financial Protection (CFPB) published in the Federal Register for public comment an Interim Final Rule implementing amendments to the Alternative Mortgage Transaction Parity Act (AMTPA) made by the Dodd-Frank Act (Dodd-Frank).

AMTPA authorizes state-licensed or state-chartered housing creditors (state housing creditors) to make alternative mortgage transactions in compliance with federal rather than state law, in order to establish parity and competitive equality between state and federal lenders.

Effective July 21, 2011, Dodd-Frank amended AMTPA to transfer rule-writing authority to the CFPB and to narrow the scope of federal preemption.

After July 21, 2011 Dodd-Frank provides that state housing creditors may only make alternative mortgage transactions under AMTPA if they comply with rules issued by the CFPB, even though Dodd-Frank does not vest the CFPB with authority to issue such rules before that date.

Accordingly, CFPB interim rules are needed immediately in order to avoid a suspension in the operation of AMTPA, which would prevent state housing creditors from making variable rate loans and other alternative mortgage transactions in states where such loans are otherwise prohibited by state law.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jonathan Foxx, Lenders Compliance Group | Attorney Advertising

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