MCUL submitted a comment letter to the CFPB in response to its high-cost mortgage proposal that was mandated by the Dodd-Frank Act.
MCUL urged the CFPB to delay the effective date of the high-cost mortgage rule in order to enable credit unions to adequately adjust to the new mortgage-lending framework and ensure their respective members have uninterrupted access to mortgage credit. MCUL also urged the CFPB to reduce the number of homeownership counselors required to be provided to potential borrowers from five to at least three, refrain from expanding on the provisions of the Dodd-Frank Act by amending the definition of a “finance charge,” and refrain from introducing a new “transaction coverage rate.”
MCUL disagreed with the proposal to expand the homeownership counselor list to be provided to applicants for refinancings, home-equity lines of credit, and purchase money transactions. MCUL believes this process would only serve to delay the process to obtain access to credit. MCUL is very concerned that these proposed provisions will result in a reduced access to mortgage credit, as many creditors will decide to cease offering high-cost mortgages in an effort to avoid wading into the compliance “minefield” associated with these products.