Regulatory Compliance Update November 2017

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

The October regulatory activity was confined to the regulatory agencies attempting to align their regulations.

CFPB – The Consumer Financial Protection Bureau has issued published final amendments to two regulations and proposed amendments to three others:

Regulation X – RESPA Early Intervention Notice

The servicer must send a notice to the delinquent borrower no later than the 45th day of the delinquency.  Only one notice needs to be provided in a 180 day period.  If the borrower has served a “cease communication” notice under the fair Debt Collection Practices Act (FCDPA), or there is no loss mitigation option available or the borrower is in bankruptcy then the servicer is exempt from the requirement.  If the loss mitigation option is available or the borrower is in bankruptcy a “modified notice” can be sent.

Regulation B – Collection of Demographic Data

The new rule allows creditors to collect the demographic data even if they are exempt from the HMDA Requirements.  If the data is collected it must be retained.  We eliminated the HMDA data gathering and retention from the System.

Regulation Z – Truth in Lending

The CFPB has proposed a new rule to simplify timing rules when the borrower transitions from bankruptcy to non-bankrupt status.

HMDA – Home Mortgage Disclosure Act

The CFPB has published a new policy on how loan-level data can be modified to protect borrower’s privacy.

CRA – Community Reinvestment Act

The CFPB published proposed amendments to the CRA rules define a “home mortgage” which will include a “closed-end mortgage” and an “open-end line of credit”.  The new rules also redefine a “consumer loan” to exclude a home equity loan.  The institution will no longer be required to provide HMDA data directly to the public.  The institution would only be required to provide a notice that the public may obtain the HMDA statement from the CFPB website.

In other significant news, Richard Cordray, the first director of the CFPB, announced his resignation from the Bureau effective the end of November.

Significant Dates:

November 15, 2017 – Comments due on proposed amendment to Regulation X (RESPA) discussed above.

November 17, 2017 – Comments due on amendments to Regulation Z (TILA) discussed above.

November 24, 2017 – Comments due on HMDA revisions discussed above.

December 18, 2017 – Comments due on IRS proposal to permit employers to mask the social security number on employee’s W2 forms.

Emerging Legislation:

There have been a few bills introduced in Congress:

Community Institution Mortgage Relief Act would exempt smaller institutions from requirements to provide escrow services on first lien mortgages.

Financial Institution Customer Protection Act – Would roll back “Operation Chokepoint” – the federal enforcement initiative that targeted payday lenders.

Home Mortgage Disclosure Adjustment Act – would exempt institutions that originated less than 1,000 home mortgages or fewer than 2,000 home equity lines from certain record keeping (HMDA and CRA).