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CFPB Finalizes Relief for Small, Rural Mortgage Lenders

Posted on 9/22/2015

The Consumer Financial Protection Bureau yesterday finalized several changes that will increase the number of banks able to benefit from the bureau's small creditor and rural or underserved area exemptions in its mortgage rules. "This welcome rule is a result of hometown bankers engaging with the CFPB and the CFPB listening," said ABA EVP Bob Davis. "These changes are sensible measures that will make it easier for community banks to serve their customers, and for many bankers to meet mortgage credit needs in rural and underserved communities."

The final rule, which takes effect Jan. 1, 2016, also clarifies and expands the definition of rural areas to include any county or census block not designated as "urban" by the U.S. Census Bureau and provides a safe harbor for lenders who use the Census Bureau or CFPB websites to validate a locale's rural or underserved status. As ABA had requested, the CFPB said it would have an automated tool to determine rural or underserved status by the time the rule takes effect.

The rule includes additional provisions making it easier for lenders whose small creditor or rural or underserved status changes to obtain the benefits of the exemption. It also provides a brief extension for the transition period in which small creditors can make QMs with balloon payments regardless of location.

To read the final rule visit: http://files.consumerfinance.gov/f/201509_cfpb_amendments-relating-to-small-creditors-and-rural-or-underserved-areas-under-the-truth-in-lending-act-regulation-z.pdf



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