The Consumer Financial Protection Bureau (CFPB) has just published three compliance guides to help both lenders and consumers understand some of the new rules issued by the agency. The publications, called Small Entity Compliance Guides cover the 2013 Home Ownership and Equity Protection Act (HOEPA) rules; Regulation B implementing the Equal Credit Opportunity Act (ECOA) rule, and the Truth-in-Lending (TILA) appraisal rule covering High Priced Mortgage Loans.
CFPB says its goal is to provide an overview of the rules in a plain language and FAQ format to make the content more accessible and consumable for a broad array of industry participants, especially smaller businesses with limited legal and compliance staff.
Each guide does attempt to explain the rules and what is required of lenders under each in a straightforward manner which CFPB has managed, at least at a quick glance, to strip of most legalize. The HOEPA guide, for example contains sections defining high-cost mortgages, explains how to calculate fees and points for compliance, outlines disclosures and counseling requirements, and directs the reader to sources of additional help.
At an average of almost 30 pages the compliance guides are still a bit overwhelming but a lot of the page count is attributable to formatting - headings in a large font and a high ratio of white space - apparently an attempt to be more reader friendly.
Accompanying each compliance guide is a short consumer booklet explaining what the rule and what it means to the consumer. The four page TILA consumer guide for example lists the consumer protections available, defines flipping, outlines mortgages that are exempt from the rule, and directs the consumer to CFPB to report violations.
CFPB says that, although the guides give an overview they are not substitutes for the underlying rules. It suggests lenders familiarize themselves with the complete original text.
Find the guides here:
Guide for the ECOA Valuations Rule
Guide for the TILA HPML Appraisal Rule
