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Issue

Loan Originator Compensation

Prohibits compensation that varies with loan terms, and bans originators from being paid more if, for example, the consumer agrees to buy title insurance from the lender’s affiliate.

ABA Position

ABA urged the CFPB to drop a provision in its proposed rule that would have required lenders to offer a loan option with no discount points or origination fees any time they offered a mortgage with such payment features. ABA said this “zero-zero alternative” would not be a viable option for most banks for various structural and market reasons. The CFPB opted not to include this alternative in its final rule.

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