Which of the following is a potential consequence for lenders who do not comply with the ability-to-repay rule?

The ability-to-repay rule is part of the Dodd-Frank Act, designed to ensure that lenders evaluate a borrower's ability to repay a mortgage loan before extending credit. If lenders fail to comply with this requirement, they may face severe consequences, which include legal repercussions and penalties imposed by regulatory bodies. Non-compliance can result in lawsuits from consumers who may argue that they were misled or placed in loans they could not afford, leading to financial distress. Regulatory agencies such as the Consumer Financial Protection Bureau (CFPB) have the authority to impose fines, restrict lending activities, or even revoke a company's ability to operate in the mortgage market altogether.

This focus on ensuring borrowers can repay their loans is crucial not only for consumer protection but also for maintaining the overall integrity of the lending system. Therefore, the potential legal consequences act as a critical deterrent for lenders to adhere to the ability-to-repay rule, thus promoting responsible lending practices in the mortgage industry.