The Consumer Financial Protection Bureau published a compliance guide to aid small banks and mortgage lenders in understanding and complying with the bureau’s Ability-to-Repay and Qualified Mortgage Rule, which goes into effect January, 2014.
Meant to explain the rule in plain language for the benefit of banks and consumers, the guide condenses the 800-page rule to a 45-page brief. Containing frequently asked questions and responses, the guide gives banks the minimum standards needed to determine a customer has the ability to repay a mortgage and meets “qualified mortgage” requirements. The guide also explains how loans are categorized as a safe harbor from litigation or a rebuttable presumption of compliance under the rule.
“Our goal is to make financial markets work. A crucial part of reaching that goal is making sure that honest businesses – particularly small businesses – have what they need to understand and comply with our new regulations, which are designed both to help consumers and make a fair playing field for companies that play by the rules,” the CFPB said on its blog when it released a guide for its remittance transfers rule last year.
The CFPB is clear that the guide is not a substitute for the rule; the purpose is to provide an “easy-to-use summary” highlighting specific issues to help small lenders, the bureau said.
During the next several weeks, the CFPB said it will publish guides for each of the new mortgage rules, which is required by the Small Business Regulator Enforcement Fairness Act of 1996.