FOR IMMEDIATE RELEASE
December 23, 2010
AARP Strongly Criticizes Proposed Truth-in-Lending Act Revisions
Rules Undermine Consumer Protections, Break with Congressional Intent, AARP Charges
WASHINGTON, DC - In a letter to the Federal Reserve Board of Governors challenging the Fed’s proposed Truth-in-lending (TILA) Mortgage Regulations, AARP reiterated its strong criticism of the proposed rules. AARP’s letter to the Fed this week detailed criticisms the Association had outlined earlier relating to the proposed rules on reverse mortgages and consumers’ rescission rights. The following quotes from the December 21, 2010 letter are from AARP Legislative Policy Director David Certner:
“We continue to believe that the [proposed regulations] greatly undermine existing consumer protections, break with Congressional intent, and exceed the rulemaking authority given to the Board.”
“[T]he Board, in our view, has used its exemption authority to create new legal requirements that are not consistent with the clear language of the relevant statutory provisions.”
“AARP is concerned that the proposed rule preempts the specific authority delegated to the Consumer Financial Protection Bureau (CFPB) by the Dodd-Frank Wall Street Reform and Consumer Protection Act [P.L. 111-203] to study marketing practices and issue regulations governing reverse mortgage transactions.”
“AARP strongly opposes the inclusion of a “safe harbor” that would effectively open the door for the “cross–selling” of any financial or insurance products to a reverse mortgage borrower so long as it is done 10 days after the loan has been made.”
“[T]he Board’s proposal evidences no consideration of the kinds of borrowers that will be impacted by the rule change. [15 U.S.C. § 1604(f)(2)(C)] In our experience, borrowers seeking to rescind are most often those who have been the victims of one or more predatory and abusive mortgages that have left them financially ravaged and facing the loss of their homes. The proposal fails to acknowledge this reality and leaves consumers more vulnerable to future potential abuses.”
“AARP believes the proposed changes relating to tender turn TILA rescission on its head and unjustifiably hold the consumer’s rescission hostage to the tender obligation.“
“Considering the current, long-term housing crisis, we find it difficult to justify the Board’s exercise of its exemption authority to deprive consumers of the benefits and protections of rescission and to substitute rules that are far less protective. While AARP acknowledges the practical difficulties embedded in the rescission process, we do not believe the Board’s rescission proposal is a fair or justified exercise of its exemption authority. “
For more information about reverse mortgages, go to www.aarp.org/revmort. For a full copy of the January 21, 2010 AARP letter to the Federal Reserve Board of Governors, please email firstname.lastname@example.org or call 202-434-2560.
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