A comment letter filed by the Missouri Credit Union Association (MCUA) with the Consumer Financial Protection Bureau (CFPB) addressed its proposed rule to amend Regulation Z to reflect changes to the Home Ownership Equity Protection Act (HOEPA) made under the Dodd-Frank Act. MCUA's comments focus on aspects of the HOEPA Proposal that are directed at mitigating the unintended consequences of an expansion to the definition of “finance charge,” which has been proposed by the agency in a separate rulemaking. Essentially, an expanded finance charge would result in an increase to the APR that is used under HOEPA to determine whether a mortgage loan is considered to be “high-cost,” and thus subject to the requirements of HOEPA.
MCUA appreciates the CFPB's consideration in the proposal of an alternative to the APR threshold trigger for HOEPA coverage. However, MCUA suggests in its letter another approach to the trigger for the CFPB to consider. That approach would basically keep the APR calculation as it is now, and would provide credit unions the ability to choose the trigger approach they believe is most appropriate for their credit union.