The FRB announced that it does not expect to finalize three pending rulemakings under Regulation Z before its rulemaking authority is transferred to the Consumer Financial Protection Bureau. The proposed rules were part of the FRB’s comprehensive review of its mortgage lending regulations under the Truth in Lending Act. The first phase of the review consisted of two proposals issued in August 2009, which would have reformed the consumer disclosures under TILA for closed-end mortgage loans and home equity lines of credit. The third proposal, issued in September 2010, would have included changes to the disclosures consumers receive to explain their right to rescind certain loans and would have clarified the responsibilities of the creditor if a consumer exercises this rescission right. In addition, the September 2010 proposal would have included changes to the disclosures for reverse mortgages, proposed new disclosures for loan modifications, restrictions on certain advertising practices and sales practices for reverse mortgages, and changes to the disclosure obligations of loan servicers. Because the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Consumer Financial Protection Bureau to issue a proposal to combine the TILA and Real Estate Settlement Procedures Act disclosures within approximately one year, the FRB determined that proceeding with the 2009 and 2010 proposals was not in the public interest. Click here for the FRB’s press release.
Alert February 08, 2011