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March 24, 2015
McConnell, others ask Cordray to reevaluate 'rural' for QM
Senate Majority Leader Mitch McConnell, R-Ky., and two other senators have asked CFPB Director Richard Cordray to create an appeals process related to an exemption allowing balloon payments on qualified mortgages in "rural" or "underserved" areas.
The senators said the rule's current definition of "rural," included in the QM/ability-to-repay rule, still poses a problem in areas that could benefit from the exemption.
"The current definition, as established by the CFPB, excludes a significant number of demonstrably rural areas and – just as importantly – neglects to provide rural communities with any input in the process," McConnell with Sens. Joe Manchin, D-W.Va., and Dean Heller, R-Nev., wrote to Cordray last week.
The senators said despite CFPB's proposed changes to the definition, they remain concerned that some rural communities are being left out. They asked Cordray to implement an appeals process so communities excluded from the definition of rural can have their status reconsidered.
The senators also asked that CFPB retain the three-year time period used to determine whether a creditor is operating mostly in a rural or underserved area; CFPB's proposal would shorten the time frame to just one year.
In addition, the senators asked the bureau to "relax the requirement" that 50 percent or more of a creditor's mortgage originations are in rural or underserved areas if the creditor is to qualify for the rural exemption. "Many rural and underserved areas receive essential services from small community lenders that border rural areas or do business in areas not designated as rural, and these parts of the population should be afforded relief to ensure the continuity of access to mortgage credit," they wrote.
CFPB's proposal expanding the definition of rural areas is out for comment until March 30.
The senators said the rule's current definition of "rural," included in the QM/ability-to-repay rule, still poses a problem in areas that could benefit from the exemption.
"The current definition, as established by the CFPB, excludes a significant number of demonstrably rural areas and – just as importantly – neglects to provide rural communities with any input in the process," McConnell with Sens. Joe Manchin, D-W.Va., and Dean Heller, R-Nev., wrote to Cordray last week.
The senators said despite CFPB's proposed changes to the definition, they remain concerned that some rural communities are being left out. They asked Cordray to implement an appeals process so communities excluded from the definition of rural can have their status reconsidered.
The senators also asked that CFPB retain the three-year time period used to determine whether a creditor is operating mostly in a rural or underserved area; CFPB's proposal would shorten the time frame to just one year.
In addition, the senators asked the bureau to "relax the requirement" that 50 percent or more of a creditor's mortgage originations are in rural or underserved areas if the creditor is to qualify for the rural exemption. "Many rural and underserved areas receive essential services from small community lenders that border rural areas or do business in areas not designated as rural, and these parts of the population should be afforded relief to ensure the continuity of access to mortgage credit," they wrote.
CFPB's proposal expanding the definition of rural areas is out for comment until March 30.
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