View Rule

View EO 12866 Meetings

Printer-Friendly Version Download RIN Data in XML

CFPB

RIN: 3170-AA13

Publication ID: Spring 2013

Title: Loan Originator Compensation Requirements Under the Truth in Lending Act (Regulation Z)
Abstract: The CFPB published for public comment in August 2012 a proposed rule amending Regulation Z (Truth in Lending) to implement amendments to the Truth in Lending Act (TILA) made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). On January 20, 2013 the CFPB issued a final rule which was published in Federal Register on February 15, 2013. The final rule implements requirements and restrictions imposed by the Dodd-Frank Act concerning loan originator compensation; qualifications of, and registration or licensing of loan originators; compliance procedures for depository institutions; mandatory arbitration; and the financing of single-premium credit insurance. The final rule revises or provides additional commentary on Regulation Z's restrictions on loan originator compensation, including application of these restrictions to prohibitions on dual compensation and compensation based on a term of a transaction or a proxy for a term of a transaction, and to recordkeeping requirements. The final rule also establishes tests for when loan originators can be compensated through certain profits-based compensation arrangements. At this time, the CFPB is not prohibiting payments to and receipt of payments by loan originators when a consumer pays upfront points or fees in the mortgage transaction. Instead the CFPB will first study how points and fees function in the market and the impact of this and other mortgage-related rulemakings on consumers' understanding of and choices with respect to points and fees. The final rule is designed primarily to protect consumers by reducing incentives for loan originators to steer consumers into loans with particular terms and by ensuring that loan originators are adequately qualified. The CFPB will issue at a later time proposed regulations on anti-steering provisions that TILA section 129B(c)(3) requires the CFPB to adopt.
Agency: Consumer Financial Protection Bureau(CFPB)	Priority: Other Significant
RIN Status: Previously published in the Unified Agenda	Agenda Stage of Rulemaking: Completed Actions
Major: Yes	Unfunded Mandates: No
CFR Citation: 12 CFR 1026
Legal Authority: 12 USC 5512 12 USC 5581 15 USC 1601 et seq

Legal Deadline:

Action	Source	Description	Date
Final	Statutory		01/21/2013

Timetable:

Action	Date	FR Cite
NPRM	09/07/2012	77 FR 55272
NPRM Comment Period End	10/16/2012
Final Rule	02/15/2013	78 FR 11280

Regulatory Flexibility Analysis Required: Yes	Government Levels Affected: None
Small Entities Affected: Businesses, Organizations	Federalism: No
Included in the Regulatory Plan: No
RIN Data Printed in the FR: Yes
Agency Contact: Charles Honig Office of Regulations Consumer Financial Protection Bureau Phone:202 435-7700