Last week, the Consumer Financial Protection Bureau (“CFPB”) published amendments to Regulation Z, which implements the Truth in Lending Act (“TILA”). The updates are 85 pages of tweaks to the rules issued in January 2013 that were effective in January 2014. The CFPB has provided for a 30-day comment period.
Financial institutions and mortgage industry participants should take note of a few changes.
- The rules provide for a limited post-consummation cure mechanism applicable to loans originated with a good faith expectation of being qualified mortgage, but ultimately exceed the points and fees limits. The excess must be refunded to the borrower within 120 days.
- Additionally, the rule presents an alternative small servicer definition for nonprofit entities that meet certain requirements.
- An additional provision modifies the existing exemption from the ability-to-repay rule for nonprofit entities that meet certain requirements.
If you would like a more complete update on the contents of this amendment, please contact Spilman or other knowledgeable counsel.
Additional changes could be implemented as organizations continue to work through challenges presented by the rules, so follow this blog for further updates.