As previously announced, references to “subprime” loans in various sections of Minnesota’s statutes will be removed. Among these are Minn. Stat. Ann. §§ 58.13(1)(a)(18) and 58.137(2)(c).
Cx18227 is provided as an “upon request” document for Ibid. § 58.13(1)(a)(18), which requires a disclosure to a borrower if the borrower qualifies for a higher investment grade loan than the one being offered. Our document promulgates the current, three criteria for defining “investment grade”, which criteria includes a reference to “subprime”.
We will be modifying Cx18227 to closely match the new definition of “investment grade”, which eliminates two of the three criteria. The bulleted list in Cx18227 will be removed and the third bullet point will be merged into the previous paragraph.
Ibid. § 58.137(2)(c), which previously promulgated the prepayment penalty prohibitions applicable to subprime loans, has been amended to apply to loans with APRs which exceed certain thresholds (similar to, but not the same as, the thresholds for high-cost mortgage loans under 12 CFR § 226.32). We will be reflecting this change in the next edition of our Prepayment Penalty Matrix.
These changes will be in effect on July 1, 2019. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.