New Federal Application Process Could Result in More “Rural” Designations for Mortgage Lenders
March 14, 2016
March 15, 2016
The Consumer Financial Protection Bureau (CFPB) announced the new process that may allow some lenders now outside rural counties to apply for “rural” designation. The CFPB will begin accepting applications on March 31. Applications can’t exceed 10 pages and must include, the identified area, justification, and applicant information.
“This will be of interest to a number of Northwest credit unions,” said John Trull, AVP of Regulatory Advocacy for the Northwest Credit Union Association. “If their applications for rural designation are granted, they may be eligible for some flexibility in mortgage lending and be able to provide more services their members need.”
In January, 2013, the CFPB issued a rule designating rural areas on a county-by-county basis, using definitions determined by the Office of Management and Budget (OMB). The “rural” definition was revised last September, to include census blocks the U.S. Census Bureau defines as being outside of urban areas.
The 2015 “Helping Expand Lending Practices in Rural Communities (HELP) Act, expands eligibility for some rural creditors to originate balloon-payment qualified mortgages. It also provides some exemptions from the required escrow account for higher-priced mortgage loans.
“This step will allow the Bureau to consider whether there are smaller institutions that merit a designation as ‘rural’ lenders but do not qualify under current guidelines,” said CFPB Director, Richard Cordray. “The Bureau is taking quick action to fulfill our responsibility to Congress and implement the law.” The application process is outlined here.
Questions about this story? Contact Lynn Heider: 503.350.2225, firstname.lastname@example.org.
Posted in NWCUA.