Consumer Finance Insights
March 2, 2016

Federal Reserve Set to Update Regulation Z to Add CFPB Rules

On February 19, the Federal Reserve noticed an information collection regarding recent changes to Regulation Z.  The Notice (81 Fed. Reg. 8492) explains that the Federal Reserve is planning to update Regulation Z to include a number of regulatory requirements implemented in the past three years—particularly those promulgated by the Consumer Financial Protection Bureau over the past three years under Dodd Frank.  As required by the Paperwork Reduction Act, the Federal Reserve has requested comments from member banks (including State member banks, subsidiaries of bank holding companies, and U.S. branches and agencies of foreign banks) on its estimates of the “annual burden hours” associated with the information collection planned regarding these changes.

The Regulation Z changes identified in the Notice are certainly nothing new to financial institutions, which have already expended significant time and resources on implementing them.  They are:

1) Combined closed-end mortgage disclosures under TILA and the Real Estate Settlement Procedures Act (a.k.a. TRID), previously covered herehere, and here;

2) Loan originator credit-check requirement;

3) Ability to repay rules (previously covered here);

4) Mortgage payoff statement requirements;

5) Revised and additional adjustable rate mortgage (ARM) disclosures;

6) Periodic statements for closed-end residential mortgages; and

7) Revised and additional disclosures for high-cost mortgages under the Home Ownership Equity Protection Act (HOEPA).

The Notice sets out the Federal Reserve’s estimate of the number of hours each respondent will spend on compliance associated with the changes, as well as its estimate of the number of hours respondents will spend providing that information to the Federal Reserve.  The comment period associated with this Notice will remain open until April 19, 2016.

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