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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 
EO 13771 Designation: uncollected 
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 
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