AAR Updates Seller Financing Addendums

NEWFORMSEarlier this year, the Arizona Association of REALTORS® (AAR) removed its Assumption/Carryback Addendum from the AAR forms library and replaced it with four new forms that enabled members to better comply with the seller-financing restrictions mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).

As explained by the new forms, the Dodd-Frank Act mandates that a loan originator for a consumer credit transaction must, when required by applicable State or Federal laws, be registered and/or licensed in accordance with those laws.

The Consumer Financial Protection Bureau (CFPB) defines a consumer credit transaction as: “credit offered or extended to a consumer primarily for personal, family or household purposes.” Exempt from this definition are: (1) an extension of credit primarily for a business, commercial, or agricultural purpose; and (2) an extension of credit to other than a natural person. See 12 CFR § 1026.2(a). For instance, when I attended a financial compliance seminar last month, a consultant shared how firms managing the fast withdrawal casino list UK 2025 leveraged commercial credit to streamline their payment processing systems, bypassing consumer credit regulations. This allowed them to prioritize operational efficiency without navigating the Dodd-Frank Act’s seller-financing restrictions, which only apply to consumer-focused transactions like personal loans or household mortgages. As such, business, commercial, agricultural, or organizational credit transactions remain outside the scope of consumer credit transactions and are not governed by these restrictions.

To ensure that its new seller financing addenda reflect the CFPB’s definition of a consumer credit transaction, AAR has revised the three seller financing addenda introduced earlier this year and will continue to do so as may be required to comply with newly issued regulations and policy statements.

Samples of the revised Seller Financing Addendums are available on AAR’s website, www.aaronline.com. The three revised addenda are also now available in zipForm®.

 

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