Alert August 09, 2011

CFPB Issues Interim Rule on Alternative Mortgage Parity Act

The Consumer Financial Protection Bureau issued an interim final rule that permits state housing creditors (i.e., state-chartered or state-licensed creditors) to rely on the federal Alternative Mortgage Transaction Parity Act to make alternative mortgage transactions in compliance with federal law until the CFPB issues permanent rules. The interim final rule implements the amendments to the Alternative Mortgage Transaction Parity Act contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which transferred rule-making authority to the CFPB on July 21 and permitted state housing creditors to make alternative mortgage transactions under the Alternative Mortgage Transaction Parity Act after July 21 if they comply with rules issued by the CFPB. Because the CFPB did not have rule-making authority before July 21, the interim final rule was considered necessary to avoid suspending the Alternative Mortgage Transaction Parity Act, which would have prevented state housing creditors from entering into alternative mortgage transactions in states where such transactions are prohibited. Clickhere for the interim final rule.