Last week the Bureau of Consumer financial Protection (BCFP) issued revised versions of the small entity compliance guides for the Loan Originator Rule and the Home Ownership and Equity Protection Act (HOEPA) Rule. Both Guides are updated for changes resulting from the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
The Loan Originator Rule, among other requirements, addresses loan originator compensation, defines the concept of a loan originator and addresses qualification and other requirements related to loan originators. The updated guide includes:
- An expansion of an exemption from the concept of a loan originator with regard to retailers of manufactured and modular homes and their employees, which resulted from the EGRRCPA;
- Revisions to the process for contacting the CFPB with informal inquiries about the rule; and
- A declaration that the TILA/RESPA Integrated Disclosure (TRID) rule is now in effect (the prior version of the guide was issued in March 2015 and the TRID rule became effective in October 2015).
The revised HOEPA Guide addresses:
- An expansion of the exemption from the concept of a loan originator made by the EGRRCPA (see Loan originator rule above), as this can affect the requirement to include loan originator compensation in points and fees for purposes of the points and fees threshold under the HOEPA rule; and
- Revisions to the process for contacting the CFPB with informal inquiries about the rule.
It is expected that the BCFP will also soon revise the Small Entity Compliance Guide for the Ability to Repay (ATR) Rule since that Rule is impacted by the HOEPA changes described above. For purposes of the points and fees cap to determine qualified mortgage loan status under the ATR Rule, the definition of “points and fees” set forth in the HOEPA rule is used.
The Home Ownership and Equity Protection Act Rule Guide is available at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_hoepa_small-entity_compliance-guide.pdf
The Loan Originator Guide is available at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_loan-originator_small-entity_compliance-guide.pdf