Newsroom

June 30, 2011 – Regulatory authority over certain mortgage loans issued by state-chartered or –licensed lenders will move from the Office of the Comptroller of the Currency, NCUA and the Office of Thrift Supervision to the Consumer Financial Protection Bureau July 21.

The transfer is called for under the Dodd-Frank Act. The act revises provisions of the 1982 Alternative Mortgage Transaction Parity Act, which permits subject creditors to make variable rate loans and engage in other alternative mortgage transactions otherwise prohibited by state law as long as they comply with certain federal regulations.

This is explained in a June 27 CFPB bulletin posted on the bureau website. In addition to the transfer of authority, the bulletin notes, the Dodd-Frank Act made the following changes:

The AMTPA definition of "alternative mortgage transaction" is revised to remove references to certain balloon loans, shared equity or appreciation transactions and mortgage loans involving other features not common to traditional fixed-rate, fixed-term transactions. It continues to define alternative mortgage transactions as loans "in which the interest rate or finance charge may be adjusted or renegotiated," the bulletin says.

As of July 21, the AMTPA will no longer serve to preempt certain general state restrictions on mortgage transactions, including restrictions on prepayment penalties or late charges.

The CFPB is required to analyze federal regulators' existing rules in moving forward with its own rulemaking. Also, the AMTPA amendments do not apply to transactions occurring on or before July 21; those remain subject to the standards set by the OCC, NCUA and OTS.

The CFPB expects to provide further guidance "as soon as possible" regarding loans made after July 21, the bulletin states.