Federal Reserve Issues New Examination Procedures for RESPA and TIL
April 30, 2015, The Board of Governors of the Federal Reserve System, Division of Consumer and Community Affairs issued Bulletin CA 15-3 announcing the Revised Interagency Examination Procedures for Regulation Z and Regulation X.
Applicability to Community Banking Organizations:
This guidance applies to institutions supervised by the Federal Reserve with total consolidated assets of $10 billion or less.
The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently developed the interagency examination procedures for Regulation Z – Truth in Lending (TILA) and Regulation X – Real Estate Settlement Procedures Act (RESPA). These revised examination procedures supersede the examination procedures transmitted with CA Letter 13-24 and CA Letter 13-25.
The procedures reflect recent amendments to Regulation Z and Regulation X, published by the Consumer Financial Protection Bureau (CFPB) in the Federal Register in December 2013 and February 2015, that revise and integrate the disclosures received in connection with most closed-end mortgage loans. These new requirements will be effective on August 1, 2015.
In addition, the attached procedures reflect various amendments to Regulation Z finalized after November 2013 and that are currently in effect. These include:
- Interagency amendments regarding higher-priced mortgage loan appraisal requirements issued in December 2013. The amendments provide additional exemptions for loans of $25,000 or less and for certain streamlined refinances. These revisions also contain special provisions applicable to manufactured home loans and extend the mandatory compliance date for those provisions until July 18, 2015.
- Amendments finalized by the CFPB in November 2014 providing an alternative small servicer definition for certain nonprofit entities, an amended ability-to-repay rule exemption for certain nonprofit entities, and a post-consummation cure mechanism for loans that exceed the qualified mortgage points and fees limit but are otherwise a qualified mortgage at consummation.
- Other amendments issued by the CFPB since November 2013 through the date of the CA Letter.
The matrix shown below is adapted from materials developed by the Federal Reserve Board of Governors:
Summary of Updates to Examination Procedures for Regulation Z and Regulation X
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
Comments are closed.