Regulatory Roundup 

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) PROPOSED RULES
Regulation B: Appraisals

The Consumer Financial Protection Bureau proposes to amend Regulation B, which implements the Equal Credit Opportunity Act, and the official interpretations (the comments) to the regulation. Per the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the proposed rule would require creditors to provide free copies of all written appraisals and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling. The proposal also would require creditors to notify applicants in writing of the right to receive a copy of each written appraisal or valuation at no additional cost. Comments must be received on or before October 15, 2012. A copy of the proposed rule can be found here.

Regulation Z: Appraisals for High-Cost Mortgages
The Federal Reserve Board, Consumer Financial Protection Bureau, FDIC, FHFA, NCUA, and Office of the Comptroller of the Currency (collectively, the agencies) are proposing to amend Regulation Z, which implements the Truth in Lending Act, and the official interpretation to the regulation. The proposed revisions to Regulation Z would implement a new TILA provision requiring appraisals for ‘‘higher-risk mortgages’’ that was added to TILA as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, the proposed rule would require creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used. Comments must be received on or before Oct. 15. A copy of the proposed rule can be found here.

Regulation Z: Mortgage Servicing
The Consumer Financial Protection Bureau is proposing to amend Regulation Z, which implements the Truth in Lending Act, and the official interpretation of the regulation. The proposed amendments implement the Dodd-Frank Wall Street Reform and Consumer Protection Act provisions regarding mortgage loan servicing. Specifically, this proposal implements Dodd-Frank Act sections addressing initial rate adjustment notices for adjustable-rate mortgages, periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts. The proposed revisions also amend current rules governing the scope, timing, content, and format of current disclosures to consumers occasioned by the interest rate adjustments of their variable-rate transactions. Comments must be received on or before Oct. 9. A copy of this proposed rule can be found here.

FEDERAL TRADE COMMISSION PROPOSED RULES
Children's Online Privacy Protection

The Federal Trade Commission will extend until Sept. 24, the deadline for commenting on additional proposed modifications to the Children's Online Privacy Protection Rule, which gives parents control over what information websites and online services may collect from children under 13. On Aug. 1, the Commission published a Supplemental Notice of Proposed Rulemaking seeking comments on proposed modifications to the Children's Online Privacy Protection Rule with a deadline of Sept. 10. In response to requests from several organizations, public comments on the Supplemental Notice of Proposed Rulemaking will now be accepted until Sept. 24. Instructions for submitting comments are found in the notice.

NCUA LEGAL OPINION LETTERS
11-0965: Video Teller Machines

The question in this Legal Opinion Letter was whether a video-teller machine can serve as a “service facility,” as that term is used in NCUA’s Chartering and Field of Membership Manual (Chartering Manual). NCUA agreed that a video-teller machine may serve as a service facility in the context of both select group additions and underserved areas. A copy of this Opinion Letter can be found here.

11-0620 – Multi-Featured Lending Products
The question in this Legal Opinion Letter was whether a federal credit union may offer a multi-featured lending (MFL) plan that utilizes one umbrella loan agreement for multiple subaccounts with open-end and closed-end credit features. The answer provided was “yes,” so long as the FCU gives appropriate disclosures specific to each transaction under the plan and complies with applicable state law. The 2010 changes to Regulation Z under the Credit Card Act still permit MFOEL plans. However, NCUA cautioned the amendments made clear that underwriting of individual advances is not allowed for an advance treated as open-end credit under a MFOEL plan. In other words, FCUs using a MFOEL plan may not underwrite particular advance requests, which have open-end and closed-end features, even where it may be appropriate to do so for safety and soundness reasons because repeat underwriting is inconsistent with open-end lending. A copy of this Opinion Letter can be found here.


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