On May 16, the Consumer Financial Protection Bureau released a list of counties it considers underserved and/or rural. Banks can rely on this list beginning June 1 through December 31, 2013; however, a different list may be used for the Ability-to-Repay and Qualified Mortgage standards that take effect next January.
The convoluted language of the bureau’s blog post on the list comes from the fact that the agency has released two sets of final rules on mortgage lending, involving different effective dates, and all of which have carve-outs for banks in rural and underserved counties.
In the first set is the CFPB’s final Escrows Rule, which takes effect June 1, and applies to loans made between June 1, 2013 and Dec. 31, 201
In the second set, we find the Ability to Repay and Qualified Mortgage rules, as well as the High-Cost Mortgage and Homeownership Counseling amendments to the Truth in Lending Act rule (HOEPA rule), which go into effect on January 10, 2014. Also included in the second set is the interagency rule on Appraisals for Higher-Priced Mortgage Loans, which goes into effect on January 18, 2014.
“This final rule establishes a temporary provision to ensure existing protections remain in place for higher-priced mortgage loans until the expanded provisions take effect in January 2014,” the bureau said.
There are other reasons the bureau has deemed the list temporary. “During the rulemaking process for these clarifications, the bureau received many comments suggesting major changes to the rural and underserved definitions and related provisions,” the agency said on its blog. “These comments were outside the scope of the narrow technical changes the rule was proposing. However, the bureau plans to finalize very soon the proposed rule the bureau issued concurrently with the Ability-to-Repay/QM Rule in January, and it will address questions of further flexibility for small institutions.”
Since the bureau has decided to use the USDA Economic Research Service’s urban influence codes to define rural counties, some counties’ status as rural or non-rural may change from the 2013 list to the 2014 list because of updated information from the 2010 Census, the agency said.