This will allow the American people to see the true intent of the Consumer Financial Protection Bureau. Elizabeth Warren alluded to this as she said banks shouldn’t fear the bureau as the mission is to make rules that protect businesses from bad actors…..and that is what these rules do regarding mortgages. Whereas some of the rules are welcomed and are already assumed such as borrowers should be able to repay the loan for goodness sakes…..like that wasn’t malfeasance during the massive mortgage fraud….what is important to the consumer is this: it deliberately writes into the rules that the public cannot take legal action against these financial institutions for failure to meet these rules. THIS IS THE SAME THING THEY ARE USING FOR NOT PROSECUTING THE CURRENT MASSIVE FRAUD. WHAT THESE THIRD WAY CORPORATE DEMOCRATS ARE TELLING US….THEY ARE THE ONES IN THE LEAD OF THIS…..IS THAT IN NO CASE WILL THE PUBLIC BE ABLE TO SEEK DAMAGES ON ANY MEANINGFUL LEVEL. THE PROTECTIONS ARE BEING OFFERED ONLY AS REGARDS DAMAGES TO THE BUSINESSES AND THEIR ABILITY TO PROFIT.

THIS IS EXACTLY WHAT WE HAVE DEMANDED BE CHANGED AND THEY ARE IGNORING THE PEOPLE! WATCH THE INTENT OF THIS SUPPOSED PROTECTOR OF THE PEOPLE!



New federal rules aim to curb risky mortgages Posted: 7:38 am Thu, January 10, 2013
By Associated Press

WASHINGTON — Federal regulators for the first time are laying out rules aimed at ensuring that mortgage borrowers can afford to repay the loans they take out.

The rules being unveiled Thursday by the Consumer Financial Protection Bureau impose a range of obligations and restrictions on lenders, including bans on the risky “interest-only” and “no documentation” loans that helped inflate the housing bubble.

Lenders will be required to verify and inspect borrowers’ financial records. The rules discourage them from saddling borrowers with total debt payments totaling more than 43 percent of the person’s annual income. That includes existing debts like credit cards and student loans.

CFPB Director Richard Cordray, in remarks prepared for an event Thursday, called the rules “the true essence of ‘responsible lending.’”

The rules, which take effect next year, aim to “make sure that people who work hard to buy their own home can be assured of not only greater consumer protections but also reasonable access to credit,” he said.

Cordray noted that in years leading up to the 2008 financial crisis, consumers could easily obtain mortgages that they could not afford to repay. In contrast, in subsequent years banks tightened lending so much that few could qualify for a home loan.

The new rules seek out a middle ground by protecting consumers from bad loans while giving banks the legal assurances they need to increase lending, he said.

The mortgage-lending overhaul is a priority for the agency, which was created under the 2010 financial law known as the Dodd-Frank Act. The agency is charged with reducing the risk of a credit bubble by helping to ensure that borrowers are better informed and loans are more likely to be repaid.

The agency is charged with writing and enforcing rules that flesh out the law passed by Congress. Some provisions are required under the law, but the agency had broad discretion in designing many of the new requirements.

The rules limit features like teaser rates that adjust upwards and large “balloon payments” that must be made at the end of the loan period.

They include several exceptions aimed at ensuring a smooth phase-in and protecting access to credit for underserved groups. For example, the strict cap on how much debt consumers may take on will not apply immediately. Loans that meet separate federal standards also would be permitted for the first seven years.

Balloon payments would be allowed for certain small lenders that operate in rural or underserved communities, because other loans may not be available in those areas.

The bureau also proposed amendments that would exempt from the rules some loans made by community banks, credit unions and nonprofit lenders that work with low- and moderate-income consumers.


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Compliance Policy Cordray Says CFPB to Propose Changes on Credit for Working Moms  By Carla Main - Sep 21, 2012 8:37 AM ET   Bloomberg Financial

The Consumer Financial Protection Bureau will propose changes to regulations that critics have charged could bar stay- at-home mothers from obtaining credit cards, its director, Richard Cordray, said yesterday.

Cordray said at a hearing of the House Financial Services Committee that the agency will engage in rulemaking on the topic and would propose the rule before Congress reconvenes after the election. It could affect major credit card issuers such as Capital One Financial Corp. (COF), JPMorgan Chase & Co. (JPM) and Bank of America Corp.

The plans stem from an effect of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which governs how card issuers consider applications from non-working spouses.

The Federal Reserve, which wrote the first regulations under the law, stated that a card issuer may not determine a customer’s ability to repay by relying on income or assets of a person who is not liable for the debt unless the applicant has an ownership interest on the other person’s assets or income.

Members of Congress have argued the rule could limit the ability of stay-at-home mothers to get credit. Cordray said he largely agreed with their assessment.




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Consumer Credit Scores Vary From What Lenders See, CFPB Says

By Carter Dougherty - Sep 25, 2012 2:47 PM ET Bloomberg Financial

Tim Boyle/Bloomberg Customers with a sales representative at a car dealership in Niles, Illinois. One in five U.S. consumers is likely to receive a credit score different from the one given to lenders, potentially closing off access to credit for millions of Americans, the Consumer Financial Protection Bureau found in a study released today.

The study comes five days before the consumer agency, created by the Dodd-Frank law of 2010, begins supervision of credit-reporting companies’ records and practices. The work involves direct review of about 30 businesses, including the three biggest, Equifax Inc. (EFX), Experian Plc (EXPN) and TransUnion Corp. (TRUN)

“This study highlights the complexities consumers face in the credit scoring market,” Richard Cordray, the agency’s director, said in an e-mailed statement. “When consumers buy a credit score, they should be aware that a lender may be using a very different score in making a credit decision.”

Under the Fair Credit Reporting Act, consumers are entitled to a free copy of their credit report each year. Consumer advocates have charged that credit-reporting companies provide varying scores to lenders, potentially raising the cost of credit or depriving consumers of it entirely.

“This is like choosing what college to apply to without knowing your SAT or ACT scores, or whether the college uses ACT or SAT,” Chi Chi Wu, an attorney with the Boston-based National Consumer Law Center, said in an interview.

Wu said the report highlights the need for new legislation that would give consumers access to any credit report or score prepared about them.

Mostly Right Stuart Pratt, head of the Washington-based Consumer Data Industry Association, underscores that the study shows how “73 to 80 percent of the time” the information consumers receive is correct.

He said that in the cases where there is a difference between the information the lender and consumer receive, it may have no effect on what kind of loan is or is not made. Much will depend, Pratt said in an interview, on how the lender uses the score in its decision-making.

“We can’t take this as absolute truth,” Pratt said.

The CFPB found that one in five consumers would likely receive a “meaningfully different” score than their lender, potentially resulting in harm to those consumers. At the same time, consumers are unlikely to know about the discrepancy.

“Consumers who have reviewed their own score may expect a certain price from a lender, may waste time and effort applying for loans they are not qualified for, or may accept offers that are worse than they could get,” according to the study.

To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net