Search
RSS
Our Attorneys
Twitter
Twitter

Entries in Regulation Z (10)

Wednesday
Oct162013

Maine AchievesTruth-in-Lending Harmony, Adopts Regulation Z-3

Maine financial regulators have now finalized Regulation Z-3 in order to harmonize the State’s Truth-in-Lending rules with recently adopted changes approved by the Consumer Financial Protection Bureau.

The joint rulemaking was issued October 15, 2013 by Maine’s Bureau of Financial Institutions (Chapter 138) and Maine’s Bureau of Consumer Credit Protection (Chapter 240).

Under the new rules, federal Regulation Z (12 CFR Part 1026) and Regulation M (12 CFR Part 1013) are conformed to Maine law.  The new rule also includes changes to both rules that were adopted on September 13th of this year by the CPFB.

The original notice of rulemaking was issued on August 20, 2013 as reported in Banking Law Update

Regulation Z-3 became effective on October 15, 2013.

Tuesday
Aug202013

Maine Financial Regulators Propose "Regulation Z-3"

On Tuesday August 20th, the Maine Bureau of Financial Institutions and the Maine Bureau of Consumer Credit Protection issued a notice of proposed rulemaking entitled Regulation Z-3. The new rule would be codified as Chapter 138 of the rules of BOFI, and Chapter 240 of the rules of BCCP.

Click to read more ...

Friday
Apr122013

CFPB Issues Small Entity Compliance Guide on Ability-to-Repay and Qualified Mortgage Rule

The Consumer Financial Protection Bureau (“CFPB”) recently issued a Small Entity Compliance Guide on the Ability-to-Repay and Qualified Mortgage Rule (the “Rule”). The Rule was issued under Dodd-Frank. The Guide provides an overall summary of the Rule and discusses application of the Rule in a Q&A format. The CFPB issued the final rule on January 10, 2013, with an effective date of January 10, 2014.

Click to read more ...

Friday
Feb152013

CFPB Issues Final Rules Governing MLO Compensation Restrictions and Other Requirements under Regulation Z

The Consumer Financial Protection Bureau (“CFPB”) recently issued a final rule (the “Final Rule”) implementing restrictions on mortgage loan originator (“MLO”) compensation under Regulation Z (Truth in Lending), along with additional interpretive guidance. These restrictions, which prohibit MLO compensation based on mortgage loan terms, or “proxies” for such terms, were mandated under the Dodd-Frank Act. In a number of prior blogs, we discussed the CFPB’s evolving guidance on these restrictions. One issue of particular interest was whether profit-based retirement and bonus plans would be prohibited under the rationale that profit serves as a “proxy” for certain loan terms such as interest rate (a view taken by Federal Reserve staff members when the rule was first introduced).

Click to read more ...

Tuesday
Aug282012

CFPB Proposes Amendments to Regulation Z for MLO Compensation Restrictions

The Consumer Financial Protection Bureau (“CFPB”) has issued a proposed rule for public comment that would amend Regulation Z (Truth in Lending) to implement provisions of the Dodd-Frank Act.  The amendments would include, among other things, new rules governing the participation of mortgage loan originators (“MLOs”) in employer profit-sharing plans.  Under Regulation Z, MLO compensation cannot be based on mortgage loan terms and conditions, or “proxies” for such terms and conditions.  In a prior blog, we discussed the issue of whether, under Regulation Z, MLO participation in a profit-sharing compensation plan could be prohibited under the rationale that profitability is a “proxy” for mortgage loan interest rate (a loan term).

 The proposed rule provides additional guidance with examples of when factors used to determine compensation could serve as “proxies” for loan terms and conditions.  In addition, the proposed rules states that employer profit-based contributions to 401(k) plans, employee stock plans, and other “qualified” plans would be generally permissible, provided that contributions are not based on the terms of an MLO’s individual transactions.  Bonuses and contributions to non-qualified profit-sharing plans from general profits would be permitted provided that (i) contributions are not based on the terms of an MLO’s individual transactions, and (ii) in the prior tax year, not more than a certain percentage of the person’s or business unit’s revenues are generated from the person’s mortgage business.  The CFPB is seeking comment on whether the threshold should be 25% or 50%. Bonuses and contributions to non-qualified profit-sharing plans from general profits would also be permitted if an MLO closed five or fewer mortgage transactions during the 12-month period preceding the employer’s determination to make a payment.  Public comments on the proposed rule (which may be made online) are due by October 16, 2012.