Blog Post

Consumer Financial Protection Bureau Updates

michaelchristians • Mar 16, 2019

2019 List of Rural and Underserved Counties

The Consumer Financial Protection Bureau (“CFPB”) has updated its list of rural and underserved counties for 2019. The revised list is available on the CFPB’s website at www.consumerfinance.gov.

Small creditors who originate at least one loan secured by a first lien on property located in a rural or underserved county are exempt from the following under Regulation Z:

Requirement to establish an escrow account in connection with a higher-priced mortgage loan (“HPML”) secured by a first lien; and
Prohibition against originating a qualified mortgage with a balloon payment.

If your financial institution originates at least one qualifying loan in a rural or underserved county in 2019, you will be eligible for the exemptions mentioned above for calendar year 2020.

In addition, the dual appraisal requirement for an HPML secured by a “flipped property” is not applicable if the property securing the loan is located in a rural or underserved county.

Payday Lending Rule

The CFPB has issued a notice of proposed rulemaking (“NPRM”) to significantly lessen the compliance burden associated with its previously released payday lending rule.

Currently, the payday lending rule:

Requires a financial institution to determine an applicant’s ability to repay in connection with a covered loan;
Prohibits a financial institution from making repeated attempts to withdraw payment for a covered loan from the borrower’s account after its second consecutive attempt to do so has failed;
Imposes new disclosure requirements; and
Establishes a new registered information system network and associated information furnishing requirements.

The NPRM proposes to eliminate both the ability to repay and registered information system network requirements. However, the restriction on repeated payment transfer attempts and associated disclosure requirements are unaffected. The comment period closes on May 15, 2019.

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