CFPB Spring 2025 Regulatory Agenda Mortgage Items
The CFPB recently released its Spring 2025 Regulatory Agenda. In this post, we focus on various residential mortgage-related items included in the Regulatory Agenda. We will address other aspects of the Regulatory Agenda in separate blog posts. To register for our webinar on the Regulatory Agenda, click here.
An initial observation regarding the Regulatory Agenda in general is that it is very ambitious, with a total of 24 rulemaking items, plus one long term action, yet it is not clear how the CFPB could engage in this level of rulemaking given the significant reduction in force planned at the CFPB that we have reported on extensively, and most recently here and here , and also addressed in a recent podcast.
Prerule Stage – Discretionary Provisions of Loan Originator Compensation Rule
Of particular importance to the mortgage industry, the CFPB plans to seek information in advance of preparing a proposed rule to rescind all or parts of the “discretionary compensation provisions” of its loan originator compensation requirements under the Truth in Lending Act (TILA). Those provisions were published in a revised Regulation Z loan originator compensation rule on February 15, 2013. The Regulatory Agenda indicates a July 2025 timeframe for an advance notice of proposed rulemaking. No such notice has been issued to date.
While the mortgage industry has lobbied for revisions to the rule, it may well oppose the rescission of various provisions. For example, Dodd-Frank added to TILA a provision under which a loan originator may not receive compensation from a party other than the consumer if the consumer pays discount points or origination points or fees. Congress gave the CFPB authority to waive or provide exemptions to this restriction, and the loan originator compensation rule includes an exemption that permits a party other than the consumer to compensate a loan originator even if the consumer pays discount points or origination points or fees, as long as the consumer does not pay compensation directly to the loan originator. The rule also has additional exemptions that are not in TILA. The exemptions (1) expressly provide for contributions to designated tax-advantaged plans, such as 401k plans, of loan originators, (2) permit mortgage profits-based payments to loan originators, subject to certain limitations, and (3) permit a loan originator to lower their compensation on a loan to cover an unforeseen cost, or unforeseen increase in a cost, that the consumer would otherwise have to pay. The industry likely would oppose the complete elimination of the exemptions.
Prerule Stage – Discretionary Provisions of Regulation X and Regulation Z Servicing Rules
The CFPB plans to issue advance notices of proposed rulemaking to solicit comments and information to help the CFPB assess the costs and benefits of the “discretionary provisions” of the Regulation X and Regulation Z mortgage servicing rules for the purpose of determining whether the CFPB should amend or rescind those provisions. The Regulatory Agenda indicates a July 2025 timeframe for the advance notices of proposed rulemaking. No such notices have been issued to date. The details of the proposals will be key with regard to whether the mortgage industry will support or oppose the changes.
Final Rule Stage – Finalization of Mortgage Servicing Rule Revisions
The CFPB plans to finalize the mortgage servicing rule revisions that it proposed in July 2024 . The Regulatory Agenda indicates a December 2025 timeframe for a final rule. While the mortgage industry seeks changes to the mortgage servicing rules, it generally opposed the proposal. If the final rule is close to the proposal, it likely will face one or more legal challenges from the industry given the significant operational burdens that would be imposed on servicers, the absence of express statutory authority for many aspects of the proposal, and the language access requirements under consideration by the CFPB at the time of the proposal that did not appear in the proposed regulatory text and were simply addressed as concepts in the preamble to the proposal.
Long Term Action – Ability to Repay Rule
In a separate long-term actions part of the Regulatory Agenda the CFPB addresses the ability to repay requirements applicable to mortgage loans under TILA. After summarizing the regulatory history of the Regulation Z ability to repay rule, the CFPB states “[a]s the Bureau continues to monitor market developments, the Bureau will evaluate whether any further adjustments to ATR requirements and QM definitions are warranted.” The CFPB may need to tread carefully.
In the waning days of Director Kathleen Kraninger’s tenure as CFPB Director, the CFPB issued a final rule amending the ability to repay rule. Among other changes, the final rule replaced the strict 43% debt-to-income (DTI) ratio basis for the general qualified mortgage with an annual percentage rate (APR) limit. Early in Director Rohit Chopra’s tenure as CFPB Director, the CFPB moved to delay the implementation of the change, which was opposed by both industry and consumer groups. An apparent concern of the groups was that the CFPB would use the delay to revisit the general qualified mortgage change, and both industry and consumer groups preferred the APR-based qualified mortgage over the DTI-based qualified mortgage. While the CFPB delayed the implementation of the change, it did not act to modify the change. Any future attempts to move away from the APR-based qualified mortgage may be met with opposition by industry and consumer groups.
Proposed Rule Stage – Equal Credit Opportunity Act/Regulation B
Although not a mortgage-specific item, the agenda also provides that the CFPB is considering whether rulemaking or other actions regarding Regulation B would facilitate compliance with the Equal Credit Opportunity Act (ECOA) by clarifying the obligations imposed by the statute. As previously reported, President Trump issued an Executive Order in April 2025 providing that “[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.” Regulation B contains language supporting the use of the disparate impact theory under the ECOA. Query whether the CFPB is now considering the elimination of such language from the Regulation.
We will continue to monitor CFPB residential mortgage related regulatory actions, as well as all other CFPB regulatory agenda related actions, and will blog about further developments as they occur.
