The Consumer Financial Protection Bureau (CFPB) recently released updated exam procedures for the new mortgage regulations slated to take effect in January 2014. The update includes Interim TILA Examination Procedures and Interim ECOA Examination Procedures. Aspects of the procedures address appraisals, escrow accounts, compensation and qualifications for loan originators, among other topics.
The CFPB touted the updated exam procedures as offering financial institutions and mortgage companies valuable guidance on what the CFPB will be looking for as the rules become effective. According to CFPB Director Richard Cordray, “The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be. By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.”
On closer inspection, however, the revised procedures are little more than summaries of the requirements set forth in the regulations. Examiners still have broad discretion to interpret what constitutes a violation. Entities subject to the new mortgage regulations as of January 2014 should consult with experienced counsel to develop and implement a compliance plan.
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