Pending a transfer of authority from Dodd-Frank to the Consumer Financial Protection Bureau, the bureau filed an interim final rule Friday that allows state-licensed loan originators to continue making alternative mortgages under federal law, rather than state law, under the Alternative Mortgage Transaction Parity act of 1982.
The bureau, still without a director, will have limited authority until a director has been confirmed. President Obama nominated former Ohio Attorney General Richard Cordray on Monday, but the confirmation process has been thwarted by House Republicans who say they will not support any director nomination until the bureau receives reforms.
The rule, which fills a regulatory gap pending the authority transfer, is the first major rule that the new bureau, launched Thursday, has filed with the Federal Register.
“Without an interim final rule that takes immediate effect, state housing creditors would no longer be able to make variable rate mortgage loans and other alternative mortgage transactions pursuant to AMTPA in states that prohibit such transactions, thus denying consumers access to that form of credit,” the CFPB said.
Under the rule, mortgage originators who are state-licensed can operate under AMPTA through July 22, 2012.
“The CFPB does not believe that Congress intended its amendments to AMTPA to create a regulatory gap that would interrupt access to credit,” the bureau stated in the Federal Register.
The CFPB is seeking public comment on the rule.
Written by Elizabeth Ecker