CFPB Issues Final Ability-To-Repay And Qualified Mortgage Rule

Rule lists criteria that lenders must consider in determining whether a prospective borrower has the ability to repay a loan and defines Dodd-Frank's concept of a "qualified mortgage."

On January 10, the Consumer Financial Protection Bureau (CFPB) issued its final rule,¹ "Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act" (Final Rule), which defines the term "qualified mortgage" and interprets the ability-to-repay requirements mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act sections 1411–1412 (Dodd-Frank) amendments to the Truth in Lending Act. The Final Rule affects all creditors of residential mortgage loans subject to the Truth in Lending Act and goes into effect on January 10, 2014.