Originally set to end on Sept. 7, the public comment period has been extended to Nov. 6. The agency said “that it is appropriate to provide the public with additional time to prepare their comments.”
The proposed rule would change the definition of “finance charge,” a term intended to reflect the cost of the loan to the consumer and used to calculate the annual percentage rate.
Additionally, the proposal would eliminate several exceptions that exclude certain costs like title insurance from the calculation of the finance charge.
“We want APR to be a more accurate reflection of the overall cost of credit,” the agency said. “However, higher APRs and finance charges could affect the number of loans subject to other legal requirements and protections, such as special disclosures and restrictions for high-cost mortgages.”
The CFPB, in a separate rule-making, would establish an adjustment that would prevent loans with higher APRs and finance charges from being subject to other special disclosures. That rule would ultimately alter the coverage test for high-cost mortgage protections to factor in higher APRs.
All deadlines other than the public comment period under both of the proposed rules will remain the same.