CFPB Report March 1, 2013

March 1, 2013

CBA Submits Comment on Additional QM Proposal

On Monday, February 25, 2013, CBA filed a comment letter with the CFPB in response to the QM proposal the agency issued last month, in connection with the final QM rules that were also issued at that time. Highlights of the letter are as follows:

  • In our earlier comment letter in response to the initial QM proposal issued in 2011, CBA opposed the inclusion of loan originator compensation within the three percent lender points and fees limit that would apply to QM loans. In our letter submitted this week, we support the flexibility included in the CFPB proposal issued last month to eliminate the “double counting” that would occur when lenders compensate loan originators with funds collected from consumers. We also continue to urge the CFPB to resolve other issues with regard to the points and fees limit, such as the elimination of the distinction between affiliate and non-affiliate fees.
  • CBA does not support the new QM category for small lenders that was included in this latest proposal. The same QM criteria should apply to lenders of all sizes, as this differentiation based on the size of the lender would be of no benefit to consumers.
  • CBA supports the proposed exemption for various government loan programs, but would appreciate clarification as to which programs would qualify. We also urge the CFPB expand this exemption to include other types of loan modification and refinancing programs that would benefit borrowers.

CBA continues to monitor the issue and will report any future developments. 

Cordray Addresses National Association of Attorneys General

On Tuesday, February 26, 2013, Director Cordray delivered a speech before the National Association of Attorneys General, addressing several areas of focus currently underway at the CFPB. Among other things, he stressed (1) a need to make mortgage lending simpler and more transparent; (2) a preference that more consumer-protective state laws not be preempted; and (3) the agency's concern with preventing racial discrimination in the financial industry.

“We all have seen how badly consumers were hurt by the recent financial crisis. As our economy and our society recover more fully, we are working to smooth their pathway in many ways, such as by addressing deceptive practices, debt traps, dead ends, and discrimination,” Corday remarked. “We are also committed to educating consumers and providing them with the kind of trustworthy and helpful information they need to make responsible financial decisions. We are glad to team up with you in joint efforts to achieve these goals.”