On May 31, the Consumer Financial Protection Bureau (CFPB or Bureau) announced that it is seeking public comment on new data and information that it has received in a rulemaking to require lenders to assess consumers’ ability to repay mortgage loans before extending them credit. The comment period will close on July 9.
Sections 1411, 1412, and 1414 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) created new Truth in Lending Act (TILA) section 129C, which, among other things, establishes new ability-to-pay requirements and provides a presumption of compliance with those requirements if the mortgage loan is a “qualified mortgage.” On May 11, 2011, the Board of Governors of the Federal Reserve System (Board) published for notice and comment a proposed rule amending Regulation Z (Truth in Lending) to implement amendments to the TILA made by the Dodd-Frank Act. The proposed rule addressed new ability-to-repay requirements that generally will apply to consumer credit transactions secured by a dwelling and the definition of a “qualified mortgage.” Among other consumer financial protection laws, the Dodd-Frank Act transferred the Board’s rulemaking authority for TILA 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, to seek comment specifically on certain new data and information submitted during or obtained after the close of the original comment period. As the Bureau explained, "Through various comment letters, ex parte communications, and the Bureau’s own collection of data, the Bureau has received additional information and new data pertaining to the proposed rule. The Bureau is interested in providing opportunity for additional public comment on these materials." The Bureau also made it clear that it "is not soliciting comment on other aspects of the proposed rule. Therefore, the Bureau encourages commenters to limit their submissions accordingly."
Specifically, the "Bureau seeks comment on mortgage loan data that the Bureau has received from the Federal Housing Finance Agency (FHFA). To date, the Bureau has received a sample drawn from the FHFA’s Historical Loan Performance (HLP) dataset along with tabulations from the entire file. The data include a one percent random sample of all mortgage loans in the HLP dataset from 1997 through 2011; and tabulations of the HLP dataset by FHFA showing the number of loans and performance of those loans by year and debt-to-income (DTI) range."
It is unclear whether the Bureau reopened the comment period out of necessity in light of the ex parte communications it received. For more information, click.