Examination procedures for two new mortgage rules have been published. With the procedures in hand, lenders have advance notice of exam expectations.
The interim examination procedures were released Tuesday for the Truth in Lending Act and the Equal Credit Opportunity Act.
A final rule that revised Regulation Z to implement amendments to TILA was issued on Jan. 19. Guides for both TILA and ECOA were released in May.
On Tuesday, the Consumer Financial Protection Bureau said that it published the first update to its examination procedures for regulations issued in January.
“The exam procedures offer financial institutions and mortgage companies valuable guidance on what the CFPB will be looking for as the rules become effective,” the bureau said.
The procedures will help regulated entities to understand how they will be examined for CFPB rules that set qualification and screening standards for loan originators, prohibit steering incentives and prohibit dual compensation:
An overview of examination procedures for compliance with rules that protect borrowers on higher-priced mortgage loans, prohibit the waiver of consumer rights and prohibit mandatory arbitration is also provided.
In addition, lenders will understand how they will be examined for compliance with requirements that lenders provide appraisal reports and valuations as well as the prohibition of financing single-premium credit insurance.
“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,” CFPB Director Richard Cordray said in the statement. “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.”
