February 28, 2013

The Consumer Financial Protection Bureau's Ability-to-Repay and Qualified Mortgage Rule

Arnold & Porter Advisory

On January 10, 2013, the Consumer Financial Protection Bureau ("CFPB") issued its final Ability-to-Repay and Qualified Mortgage rule, amending Regulation Z and implementing Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"). Sections 1411 and 1412 require lenders to assess consumers' ability to repay home loans before extending credit and provide a safe harbor and a presumption of compliance with the ability-to-repay requirement for so-called "qualified mortgages." The final rule becomes effective January 10, 2014.

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