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1) Mar 16 -- Regulation Z's Mortgage Loan Originator Rules Review Pursuant to the Regulatory Flexibility Act

The Consumer Financial Protection Bureau (CFPB or Bureau) is conducting a review of Regulation Z's Mortgage Loan Originator Rules (Loan Originator Rules) pursuant to section 610 of the Regulatory Flexibility Act. Regulation Z, which implements the Truth in Lending Act (TILA), among other things, imposes certain requirements on: loan originator compensation; qualification of, and registration or licensing of, loan originators; compliance procedures for depository institutions; mandatory arbitration; and the financing of single premium credit insurance. As part of this review, the Bureau is seeking comment on the economic impact of the Loan Originator Rules on small entities. These comments may assist the Bureau in determining whether the Loan Originator Rules should be continued without change or amended or rescinded to minimize any significant economic impact of the rules upon a substantial number of such small entities, consistent with the stated objectives of applicable Federal statutes. Comments must be received on or before May 1, 2023.

FRN: https://www.federalregister.gov/d/2023-05295
2) Mar 10 -- CFPB starting mandated review of mortgage loan originator rules [blog]

The mortgage loan originator rules, part of the Truth in Lending Act’s Regulation Z, protect homebuyers from anti-competitive practices, like double-dealing or steering activities, that lead consumers into more expensive loans.

The Consumer Financial Protection Bureau is requesting the public’s input on the economic impact of the mortgage loan originator rules on small mortgage companies. We may use the feedback we receive to inform potential changes to the rules. We regularly conduct 10-year reviews of rules that have, or will have, a significant economic impact on small businesses. The mortgage loan originator rules are due for this standard review process.

The mortgage loan originator rules cover individuals or companies that are paid to arrange, negotiate, or obtain mortgage credit for their customers. Mortgage lending companies, mortgage brokers, and loan officers may be considered loan originators. The rules prohibit dual compensation and steering practices that do not benefit borrowers, as well as prohibit compensating loan originators based on the terms of a mortgage transaction.

Before the rules, loan originators did not have to act in the best interests of clients. They could even be paid to steer homebuyers toward more expensive mortgages. For example, a loan originator acting as a mortgage broker could receive greater compensation from a lender for locking a homebuyer into a mortgage with a higher interest rate than the interest rate offered by another lender.

Comments must be received on or before 45 days after the request for information is published in the Federal Register.
RFI: https://files.consumerfinance.gov/f/documents/cfpb_regulation-z-mortgage-loan-originator-rules-regulatory-flexibility-act_2023-03.pdf
Blog: https://www.consumerfinance.gov/about-us/blog/cfpb-starting-mandated-review-of-mortgage-loan-originator-rules/

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