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Uncertainty Regarding Fed Proposal and CFPB Action on Minimum Underwriting Standards for Consideration of a Consumers Ability to Repay

Comments are due in a month on a proposed rule (Proposed Rule) issued by the Federal Reserve Board (the Board) on a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) requiring mortgage lenders to take into account a borrowers ability to repay when making a mortgage loan. However, it remains unclear what the July 22, 2011 comment period close will mean for the Proposed Rule because, the day immediately preceding expiration of the comment period, jurisdiction of the Proposed Rule will shift to the new Consumer Financial Protection Bureau (CFPB).

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