• CFPB Amends TILA and ECOA Examination Manuals to Cover New Rules
  • June 18, 2013 | Authors: Justin Angelo; Robert E. Bostrom; Thomas J. McKee; J. Scott Sheehan
  • Law Firms: Greenberg Traurig, LLP - Fort Lauderdale Office ; Greenberg Traurig, LLP - New York Office ; Greenberg Traurig, LLP - McLean Office ; Greenberg Traurig, LLP - Houston Office
  • On June 4th, the CFPB updated its TILA and ECOA examination manuals to encompass rules it issued this past January governing appraisals, escrow accounts, and compensation and qualifications for loan originators.1  The new sections seek to enhance banks and mortgage lenders’ understanding about how the exams will test compliance with the new rules. Among other things, the new rules:

    • Set qualification and screening standards for loan originators;

    • Prohibit steering incentives;

    • Prohibit “dual compensation” for loan originators;

    • Protect borrowers of higher-priced mortgage loans by increasing the duration of escrow accounts to a minimum of five years;

    • Prohibit the waiver of federal claims;

    • Generally prohibit mandatory arbitration;

    • Require lenders to provide free appraisal reports and written valuations to the consumer; and

    • Prohibit a creditor from financing single premium credit insurance with certain mortgage loans.

    The CFPB noted these revisions are the first of “what will likely be multiple updates” to the examination manual. The CFPB eventually intends to incorporate all interim examination procedures into the general supervision and examination manual.2

    1  The interim ECOA examination manual is available here, while the TILA interim examination manual is available here. 

    2  Specifically, incorporation will occur once the interim examination procedures have been amended to address all new mortgage rules issued by the CFPB.