Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z) (Consumer Financial Protection Bureau)

Summary

A Consumer Financial Protection Bureau page for its final rule on Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z). The rule amends Regulation Z and implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which generally require creditors to make a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling. It establishes protections from liability for qualified mortgages, implements section 1414 limiting prepayment penalties, and requires creditors to retain evidence of compliance for three years after a covered loan is consummated. The page was last modified Jul. 1, 2021.

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Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z)

The Bureau of Consumer Financial Protection (Bureau) is amending Regulation Z, which implements the Truth in Lending Act (TILA). Regulation Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer's ability to repay the loan. The final rule implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for “qualified mortgages.” The final rule also implements section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated.

Final rule

Read it on the Federal Register

Issued rule

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Notice and request for comment

Notice of reopening of comment period and request for comment

Page last modified Jul. 1, 2021 @ 10:57 PM EDT

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