Ability to Repay Rule and Qualified Mortgage Standard

Summary

This practice note provides a synopsis of key provisions of the Consumer Financial Protection Bureau (CFPB) ability-to-repay (ATR) rule. The ATR rule requires, among other things, creditors to make a reasonable and good faith determination that the consumer has the reasonable ability to repay the loan before or at the time of consummation of a credit transaction. The ATR rule requires creditors to consider documented and verified borrower information to evaluate the ATR.