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31 January 2013


  • Jeffrey P. Taft
    T +1 202 263 3293
  • Andrew J. Pincus
    T +1 202 263 3220

CFPB’s Ability-to-Repay and Qualified Mortgage Rule and the Recent US Court of Appeals’ Decision Regarding Recess Appointments

On January 10, 2013, the Consumer Financial Protection Bureau (CFPB) issued a long-awaited final rule implementing sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These sections generally require mortgage lenders to make a reasonable, good faith determination of a consumer’s ability to repay a mortgage loan and to establish certain protections from liability for qualified mortgages. The 800-page final rule provides a safe harbor for loans that satisfy the definition of a qualified mortgage and are not “higher-priced,” as well as a rebuttable presumption for “higher-priced” mortgage loans. The final rule is scheduled to take effect on January 10, 2014.

However, on January 25, 2013, the US Court of Appeals for the DC Circuit issued a decision invalidating President Obama’s recess appointments to the National Labor Relations Board. This decision has raised significant questions regarding the recess appointment of Richard Cordray as director of the CFPB, and the validity of certain rules issued by the CFPB, including the qualified mortgage rule.

Please join us as Mayer Brown partners Andy Pincus and Jeffrey Taft discuss the key aspects of this 800-page rule, including:

  • The potential impact of the US Court of Appeals’ decision regarding recess appointments on the qualified mortgage and other CFPB rules
  • Ability-to-repay determinations and potential penalties for noncompliance
  • The general requirements for qualified mortgages
  • The safe harbor/rebuttable presumption for qualified mortgages

Mayer Brown’s Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm’s global resources from multiple practices and offices, the Initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.

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31 January 2013

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