January 9, 2013
Authored by: Barry Hester and Bryan Cave Leighton Paisner
January 2013 promises to be a big month for mortgages and the CFPB, as a variety of provisions of Title XIV of the Dodd-Frank Act take effect by operation of law on January 21, 2013 unless the Bureau issues final rules implementing them by then. The Bureau has proven to be savvy in meeting its own Dodd-Frank deadlines. We will soon find out if it is as savvy in establishing compliance deadlines for its new mortgage rules.
Title XIV—Dodd-Frank’s “Mortgage Reform and Anti-Predatory Lending Act”—says that its provisions take effect 18 months following the designated transfer date of July 21, 2011 unless final implementing rules have been issued by the Bureau prior to that time. It also provides that such rules must take effect not later than 12 months after they are issued. So the industry has circled January 21, 2014 as a potential best-case scenario on compliance dates for the following important Title XIV content:
- Ability to Repay & “Qualified Mortgages”
- Certain New Mortgage Servicing Requirements
- High-Cost Mortgage Scope and Restrictions
- Loan Originator Compensation and Qualification
- Appraisal Standards and Disclosures
We say “potential best-case” for a few reasons. First, the Bureau may not publish corresponding final rules in time, so these provisions could take effect by operation of law on January 21, 2013. No one really believes that will happen, but it is possible. Proposed rules are pending as to each of these elements.