Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Protection Bureau Law Blog

CFPB Law Blog

News and analysisi of the priorities, initiatives and regulatory actions and proceedings of the Consumer Financial Protection Bureau


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Showing 18 posts in Truth In Lending Act.

CFPB Publishes Guide to the TILA-RESPA Loan Estimate and Closing Disclosure Forms

The Consumer Financial Protection Bureau (CFPB) on April 17, 2014 announced the release of a Guide to Completing TILA-RESPA Integrated Disclosure Forms (the Forms Guide). The CFPB states that the purpose of the Forms Guide is to provide instructions for completing the two new integrated TILA-RESPA disclosure forms, the Loan Estimate and Closing Disclosure, and to highlight common situations that may arise when completing the forms. Additionally, as the changes related to the TILA-RESPA Integrated Disclosure Rule may take time, resources, and planning to execute, the CFPB hopes the Forms Guide will help identify some of the necessary changes that may need to be implemented by organizations involved in the origination of closed-end residential mortgage loans. Settlement service providers, software providers, and other companies that serve as business partners to creditors may also find the Forms Guide helpful  Read More ›

CFPB Releases Small Entity Compliance Guide for TILA-RESPA Integrated Disclosure Rule

In late March, the Consumer Financial Protection Bureau (CFPB) issued a  Small Entity Compliance Guide (Guide) for the TILA-RESPA Integrated Disclosure Rule (TILA-RESPA Rule). In compliance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, the CFPB has issued the guide to help small businesses comply with the TILA-RESPA Rule, which is effective August 1, 2015. Read More ›

New CFPB Guidance on Higher-Priced Mortgage Loan Appraisal Rules under the Truth in Lending Act

On December 12, 2013, six federal financial regulatory agencies (the Federal Reserve, CFPB, FDIC, FHFA, NCUA, and OCC) issued a final rule amending the Dodd-Frank Act appraisal requirements for “higher-risk” mortgages to create exemptions from appraisal requirements for manufactured homes; loans of $25,000 or less (indexed each year for inflation); and certain “streamlined” refinancing transactions.  These exemptions are just in time, as the Higher-Priced Mortgage Loan (or HPML) Appraisal Rules under the Truth in Lending Act take effect on January 18, 2014.    Read More ›

CFPB Publishes New Mortgage Disclosure Forms

On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued a 1,887 page rule requiring mortgage lenders to use two new disclosures when making mortgage loans to consumers.  The new forms are a "Loan Estimate," which replaces the preliminary Truth-in-Lending Disclosure Statement and Good Faith Estimate, and a "Closing Disclosure," which replaces the final Truth-in-Lending Disclosure Statement and HUD-1 Settlement Statement.  Mortgage lenders must use the new forms by August 1, 2015. Read More ›

CFPB Files First Action Over Loan Origination Compensation: The CFPB Does Not Like Unwritten Policies

Yesterday (7/23/13), the CFPB filed its first action based on violations of “Compensation Rule” under Regulation Z, 12 C.F.R. § 1026.36(d)(1)(i), and the Consumer Financial Protection Act, 12 U.S.C. § 5536(a)(1)(A), (CFPA). The complaint alleges that Castle & Cooke Mortgage LLC, and two of its officers, “recklessly or knowingly paid quarterly bonuses” to loan officers “who steered consumers into mortgages with higher interest rates” in violation of the Compensation Rule. The Compensation Rule prohibits the payment of any type of compensation “based on any of the transaction’s terms or conditions.” The CFPB claims that the defendants had an unwritten policy of paying quarterly bonuses to loan officers based on an unwritten formula that rewarded the origination of loans with high interest rates. The CFPB believes that more than 1,100 bonuses were paid to originators under this system, which could result in civil penalties ranging from $5,000 per violation, up to $25,000 for reckless violations, and up to $1,000,000 for knowing violations. In addition to be being the CFPB’s first action over alleged violations of the Compensation Rule, the action is significant for two other reasons, which should be of concern to financial institutions. Read More ›

CFPB Publishes Two More Small Entity Compliance Guides

Adding to its growing library of Small Entity Compliance Guides, on June 7, 2013, the Bureau of Consumer Financial Protection (“CFPB”) released guidance on the revised Regulation Z (TILA) Loan Originator Rule and the new Mortgage Servicing Rules under Regulation Z (TILA) and Regulation X (RESPA). The rules were issued in January 2013, and compliance with the rules becomes mandatory on January 10, 2014. As with previous Small Entity Compliance Guides published by the CFPB, the latest publications will be useful tools to mortgage lenders and servicers of all sizes. Read More ›

CFPB Releases First Round of Updates to Exam Procedures Covering New Mortgage Regulations

On June 4, 2013, in what it deemed a “first round” of “what will likely be multiple updates” to its Supervision and Examination Manual, the CFPB published forward-looking examination procedures related to new mortgage rules under the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA) on June 4, 2013. This update identifies what CFPB examiners will be considering in evaluating compliance with the new rules when they become effective next January. Director Cordray explained that the "CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be." Cordray hopes that "[b]y releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust." Read More ›

Get Out the Popcorn (and an Energy Drink): The CFPB Releases Videos On New Mortgage Rules

The CFPB has just released a series of video presentations on the new mortgage rules issued by CFPB earlier this year. In his opening remarks, Director Cordray explains that these videos are part of “a broader effort on [the CFPB’s] part  to help you comply with the Dodd-Frank Act’s mortgage reforms and [the CFPB] rules.” These videos, cover:

The CFPB issued these videos “to provide an overview of the rules in a plain language format that makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.” Those of you hoping for action sequences involving Director Cordray will be disappointed. The videos are a series PowerPoint presentations by members of the CFPB staff. Each of the videos warns that these are just “staff guidance and not any official interpretation of the Bureau or legal advice.” This guidance is important because the videos are just overviews of the requirements and do not cover all aspects of the rules or the obligations that financial institutions face under these rules. Read More ›

CFPB Publishes Small Entity Compliance Guides for New HOEPA, ECOA, and TILA Rules- Institutions of All Sizes Should Take Notice

As readers of this blog know, in January 2013, the CFPB adopted rules governing the Home Ownership and Equity Protection Act (HOEPA), valuations under the Equal Credit Opportunity Act (ECOA), and appraisals of Higher-Priced Mortgage Loans (HPML) under the Truth In Lending Act (TILA). While these rules do not take effect until January 2014, the CFPB is wasting no time warning financial institutions of their obligations under these rules.  On May 2, 2013, the CFPB published three compliance guides for each of these rules targeted at small entities with limited legal and compliance staff. The guides can be found here: Guide for the 2013 HOEPA Rule; Guide for the ECOA Valuations Rule; and Guide for the TILA HPML Appraisal Rule. While billed as “Small Entity Compliance Guides,” mortgage lenders and servicers of all sizes could benefit from reviewing these materials to understand better the CFPB’s recent rules. Read More ›

CFPB Eases Limits On Credit Card Fees to Avoid Court Battle: Afraid of the Fight or Evidence that It Is Listening Industry Stakeholders?

The 2011 suit by First Premier Bank challenging certain credit card fee rules issued by the Federal Reserve under TILA and the Credit Card Act has been dismissed upon agreement by First Premier and the CFPB. In its complaint, First Premier argued that the rules, which attempted to regulate fees paid prior to the opening of a credit card account, exceeded the Federal Reserve’s statutory authority to regulate fees paid “in the first year during which the account is opened.” 15 U.S.C. § 1637(n); 5 U.S.C. § 706(2)(A) & (C). In July 2011, the CFPB assumed the rule making authority under TILA from the Federal Reserve and became the plaintiff in the matter. The Court enjoined the rules from taking effect and, inFebruary 2012, the CFPB advised the court that it was preparing to amended the rules so that they did not apply to fees paid prior to an “account opening.” In the amendment, which became effective on March 28, 2013, the CFPB acknowledges that the change was “necessary to resolve the uncertainty created by the South Dakota litigation.”    Read More ›