The CFPB recently published a fact sheet for small creditors operating in rural or underserved areas. As we have reported, the CFPB issued a final rule, which became effective on January 1, 2016, revising the definitions of “small creditor” and “rural areas” under Regulation Z of the Truth in Lending Act (TILA). Regulation Z allows small creditors operating in rural or underserved areas to make balloon-payment qualified mortgage loans (under the ability to repay rule) and balloon-payment high cost mortgages, and may avoid the escrow account requirement for certain higher priced mortgage loans. The fact sheet explains the changes made to these definitions. The fact sheet also refers to the application process for requesting a county or census block to be designed as rural, which we previously addressed.
The CFPB also published a small creditor qualified mortgage flowchart reflecting the rules in effect as of April 1, 2016. The chart addresses small creditor qualification, loan features, balloon payment features, underwriting, points and fees, portfolio, and compliance presumption factors. Our discussion of some of these factors can be found here.
The factsheet and chart can be found under “Quick references” on the CFPB Compliance & Guidance page, at this link.