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Joint Comment Letter to CFPB on Loan Originator Compensation Requirements
Dear Ms. Jackson:
The undersigned associations (the “Associations”) support the proposal by the Consumer Financial Protection Bureau (the “Bureau”) to delay the June 1st effective date for section 1026.36(i) in the Loan Originator Compensation Requirements rule (the “Final Rule”), which prohibits the financing of single-premium credit insurance offered in connection with residential mortgages. The Associations represent companies that either sell or underwrite credit insurance and debt protection products.
Delay in the Effective Date
The June 1st effective date originally was proposed because the Bureau believed section 1026.36(i) did not present a significant implementation burden for affected institutions. Indeed, in our comment letters on the proposed rule, the Associations expressed no concern with the timing of the effective date, or even the substance of section 1026.36(i), because the financing of single-premium credit insurance policies in connection with residential mortgages has long since ceased to be a wide-spread practice in the industry. Such insurance policies started to disappear over a decade ago when Freddie Mac and Fannie Mae decided not to purchase loans on which single-premium credit insurance was sold.
To read the full Comment Letter, download the PDF.