• Service: Advisory, Risk Consulting, Financial Risk Management
  • Industry: Banking & Capital Markets
  • Type: Publication series
  • Date: 6/6/2011

Regulatory Practice Letter #11-09 

“Ability-to-Repay” and “Qualified Mortgage” Standards Proposed under Regulation Z
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The Federal Reserve Board (“Fed”) recently released a proposed rule that would amend its Regulation Z, which implements the Truth-in-Lending Act, to reflect provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to prohibit a creditor from making a mortgage loan unless the creditor makes a reasonable and good faith determination, based on verified and documented information, that the consumer will have a reasonable ability to repay the loan, including any mortgage-related obligations (such as property taxes).