Posts tagged ‘TILA/RESPA’

Juneteenth Creates Compliance Glitch For Mortgage Lenders

The passage of legislation making Juneteenth a national holiday resulted in a compliance glitch which the CFPB could, and hopefully will, fix as early as today.

This issue sent me back to the preamble to the 2013 final TRID regulations. As the CFPB explained, neither RESPA nor TILA defines the term “business day.” As a result, for reasons that have never been clear to me, Regulation X which implements RESPA and Regulation Z which implements TILA contain separate definitions of a business day.

Most importantly, Regulation Z applies a definition of business days which includes calendar days except Sunday and legal public holidays specified in § 5 USC 6103. This is the section of law amended by Congress last week. As a result, from a strict compliance standpoint, June 19th was a national holiday and not a business day for disclosure purposes. This means that your credit union runs the risk of making loans that are out of compliance with federal regulations.

Yours truly is hopeful that common sense will prevail. Hopefully the CFPB will issue guidance clarifying that for purposes of complying with federal regulations. Lenders will not be deemed to be out of compliance for counting Juneteenth as a business day in 2021.

NY to Release Diversity and Inclusion Document to State Regulated Institutions

The Department of Financial Services will shortly release a memorandum to state chartered institutions explaining the department’s expectations as it relates to diversity and inclusion in the workplace. This publication is similar to one issued last October related to climate change initiatives. Its purpose is not to impose specific mandates at this time but to begin a discussion about the requirements that should be imposed on banks, credit unions, and mortgage lenders. When it comes to the efforts they are making to bring more diversity to middle and upper management. Stay tuned.

June 21, 2021 at 9:33 am Leave a comment

Major Mortgage Issues Still To Be Resolved

imagesLet’s face it, everyone is in a bad mood the first day back after vacation; the President of the United States is apparently no exception.  He used his first day back on the job after hobnobbing with the beautiful people to gather together the nation’s financial regulators, including NCUA’s own Debbie Matz, Federal Reserve Chairman Ben Benanke, and CFPB’s Richard Cordray, to nudge them to get a move on to finalize regulations implementing the Dodd-Frank Act.

Although the so-called big-ticket items, such as implementing the Voelker Rule, got most of the press attention, there’s plenty of crucial stuff left for the CFPB to finalize before lenders can fully begin to implement a post-Dodd-Frank consumer mortgage rule.  In fact, when it comes to the issues that are going to most directly affect the American consumer on a day-to-day basis, Richard Cordray , and not the President, was the most important guy in the room.

Here are some of the key issues the CFPB still needs to finalize:

  • How are points and fees ultimately going to be defined?  It’s great to say that to make a qualified mortgage, lenders will have to limit points and fees to 3% of the mortgage.  However, there is no final definition yet of what must be included under the 3% cap.
  • Until we know exactly what the finance charge is, we really won’t know what federal disclosures are required.  For example, under the Dodd-Frank Act, a loan is defined as a HOEPA loan if it exceeds certain thresholds.  However, as the Bureau itself has explained in a regulatory preamble, “because new categories of charges would be included in the calculation of points and fees. . .the more inclusive finance charge, which would also include most third-party charges would result in more loans being classified as high-cost loans.”
  • This all must be resolved when the CFPB finalizes its combined TILA/RESPA proposals.  Those could come out anytime between September and January.  But given that timeline, credit unions hopefully won’t have to start providing the combined disclosures until next Spring at the earliest.
  • Finally, one of the dumbest proposals still under consideration is the requirement that settlement disclosures which currently must be provided within 24 hours of closing, must be provided no later than 3 days before closing.  Don’t underestimate just how disastrous this idea is.  Can you imagine explaining to a home buyer who has gone through all the hoops of the home buying process that the closing will have to be further delayed because the federal government mandates that you have at least three days to review the document on a house you have already agreed to purchase.  Given how difficult it is to coordinate closings already, this kind of condescending mandate is going to result in a lot of people yelling at your front line employees, who are doing nothing more than complying with federal law.

Hopefully the CFPB will come to its senses, but the President has a point.  It’s time to wrap things up.

What’s done is done.  Luca Brasi sleeps with the fishes.

August 20, 2013 at 8:06 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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