On May 31st the Consumer Financial Protection Bureau (CFPB) announced that it is seeking additional public comment on new data and information that it has received in a rulemaking to require lenders to revise Regulation Z to assess consumers’ ability to repay mortgage loans before extending them credit. The latest comment period will close on July 9, 2012.
The CFPB is a new agency so we need to cut them a little slack. What the CFPB needs to consider is that quest to improve definitions may marginally improve the regulation. But if they had published the final rule in April, according to their original schedule, some would have loved it, others would have hated it. If they published today, some would love it, others would hate it. After extending the comment period to July, then considering the additional information they receive for a few months, and then publishing the final rule in late 2013, some will love it, others will hate it.
So the additional time might marginally improve the regulation, but it will, without any doubt, add to the time crunch the CFPB is creating. Let’s not forget that the mountain of new Regulation Z rules, of which the repayment rules are just one small part, must be finalized by January 21, 2013, with an effective date of January 21, 2014.
One small misstep for the CFPB, one giant mess for banks.
The notice to reopen the comment period is available at https://www.consumerfinance.gov/f/201205_cfpb_Ability_to_Repay.pdf