All in Regulation Z

CFPB Issues Statement on Juneteenth Holiday & Mortgage Closings

Adam Witmer
Regulatory Update, Regulation Z, TRID

On 6/18/2021, CFPB Acting Director, Dave Uegio, issued a statement on the impact of the new Juneteenth Holiday on residential mortgage closings. As a background, President Biden signed into law the Juneteenth National Independence Day Act on June 17, 2021, just two days before the actual new holiday of June 19, 2021. As this new holiday is a Federal Holiday, Financial Institutions immediately had concerns regarding implementation of the new Juneteenth Federal Holiday, particularly as it relates to mortgage compliance under Regulation Z and the Truth in Lending Act.

OCC Revises Credit Card Booklet

Adam Witmer
Regulation Z, Regulatory Update

On 4/29/2021, the OCC released Bulletin 2021-22 to announce they had issued a revised “Credit Card Lending” booklet of the Comptroller’s Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations (collectively, banks).

CFPB Fines Reverse Mortgage Lender for Deceptive Advertising

Adam Witmer
Regulatory Update, UDAAP, Regulation Z

On 4/27/21, the Consumer Financial Protection bureau (CFPB) announced that it had taken action against Nationwide Equities Corporation for sending deceptive loan advertisements to hundreds of thousands of older borrowers. In their release, the Bureau explained that it had found that advertisements from Nationwide Equities misled consumers about how much money they could receive from a reverse mortgage, the fees and costs associated with the products, and the consequences of nonpayment. In addition, the advertisements violated the Mortgage Acts and Practices Advertising Rule (MAP Rule), the Truth in Lending Act (TILA), and the Consumer Financial Protection Act of 2010 (CFPA). The CFPB is ordering the company to pay a penalty, cease its illegal conduct, and implement a compliance plan to affirmatively review every advertisement to ensure they do not violate federal law.

CFPB Proposes to Delay New General QM Rule

Adam Witmer
Regulatory Update, Regulation Z

On 3/3/21, the CFPB announced the release of a proposed rulemaking to delay the recently set mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. The CFPB states they are proposing to extend the compliance date to ensure homeowners struggling with the financial impacts of the COVID-19 pandemic have the options they need.

CFPB To Reconsider QM Final Rules

Adam Witmer
Regulatory Update, Regulation Z

On 2/23/21, the CFPB issued a statement that they are considering whether to initiate a rulemaking to revisit the recent Seasoned QM Final Rule. If it does, the CFPB stated that it expects it will consider whether “any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule.” Additionally, the CFPB announced that they intend to issue a proposed rule that would delay the July 1, 2021 mandatory compliance date of the General QM Final Rule. If this upcoming proposed rule becomes finalized, creditors would have a choice to use either the current GM QM loan definition or the revised GM QM loan definition for applications received from March 1, 2021 through the extended mandatory compliance date (unless a GSE ceases to operate under conservatorship prior to the extended mandatory compliance date).

VIDEO: TRID Prepayment Penalty to Recoup Costs

VIDEO: TRID Prepayment Penalty to Recoup Costs

Adam Witmer
Regulation Z, TRID

In this Compliance Clip (video), Adam answers a questions about disclosing a prepayment penalty on the Loan Estimate (and Closing Disclosure) when the note allows for a fee to recoup some costs if the loan is paid off with the first 36 months after consummation. While this shouldn’t be a day-to-day TRID question for any lender, this is something that should be looked at as this could be a systemic violation of Regulation Z if not disclosed properly. Click the link to watch this 5 minute video.

CFPB Issues Final Rule on HPML Escrow Exemption

Adam Witmer
Regulatory Update, Regulation Z

On 1/29/2021, the CFPB issued a final rule that exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). This final rule implements a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

According to the CFPB’s release, the final rule takes effect upon publication in the Federal Register and exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing HPML escrow exemption criteria are met.

Escrow Exemption Threshold for 2021

Adam Witmer
Regulatory Update, Regulation Z

On December 22, 2019, the CFPB announced the annual adjustment to the asset size threshold for small creditors under Regulation Z. This threshold applies to both the exemption to the requirement to establish an escrow account for higher-priced mortgage loans as well as the thresholds for small creditors to originate small-creditor portfolio and balloon-payment qualified mortgages.

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