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Trade groups urge CFPB to drop APR proposal

The American Bankers Association and 15 other trade groups urged the Consumer Financial Protection Bureau in a letter this week to drop a proposal to create a new, higher “all in” annual percentage rate calculation that would include additional fees and charges. The APR measure is part of the CFPB's massive proposed rule intended to combine and simplify mortgage disclosure requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act.

The trade groups noted the CFPB's own research shows that consumers confuse the APR with the note rate and it is of little value to them.

Simply adding additional fees to an unhelpful formulation that consumers do not use or understand will add significant costs and complications to the rulemaking effort, with no measurable benefit to the borrower,” they said in the letter.

Click here to read the letter.

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