Under the proposal, the CFPB will accept requests from third parties, such as trade associations or law firms, on behalf of unnamed financial entities.
If the LLPA is passed to consumers as a charge at consummation, lenders will have to disclose the added cost as an “origination charge” on the loan estimate and closing disclosure.
The proposed seasoned QM category is designed to encourage non-QM lending with additional legal certainty. But the eligibility requirements will make banks, thrifts and credit unions the main beneficiaries, or so it appears.
Of late, the CFPB has brought four enforcement actions against VA lenders for using deceptive mailers to advertise their government-backed products, assessing steep penalties. Similar regulatory actions are likely to follow.
But the scope of the proposal amended in mid-August is much narrower than the original, exempting existing state licensees, including mortgage lenders and servicers, from the California Consumer Financial Protection Law.
In particular, industry groups like the idea that third parties, including trade associations, can submit advisory opinion requests on behalf of companies, but consumer groups have their doubts.