Compliance Blog

Posted by Sarah Loats

Do you find it confusing to sort out the compliance dates of the recent Federal Reserve rules? Don't worry, you're not alone. We do too. This post is an attempt to clear up the MDIA/HOEPA confusion.

The Federal Reserve issued a final rule on July 30, 2008, which amended Regulation Z and was adopted under the Home Ownership and Equity Protection Act (HOEPA). Among other things, the final rule requires creditors to provide early TIL disclosures shortly after application for any closed-end loan secured by a consumer’s principal dwelling. The effective date for this rule is October 1, 2009. 

Also on July 30, 2008, Congress enacted the Housing and Economic Recovery Act of 2008, which includes the Mortgage Disclosure Improvement Act (MDIA). The Board recently issued a final rule to implement the provisions of the MDIA. Here’s where it gets confusing – the MDIA and its implementing provisions are effective July 30, 2009. However, these provisions broaden and add to the requirements of the Board’s recent HOEPA provisions pertaining to early disclosures. The MDIA and its implementing regulations require early disclosures for closed-end loans secured by dwellings other than the consumer's principal dwellings (i.e., second homes). It also contains timing restrictions.

Since they are so closely related, the Federal Reserve has moved up the effective dates for the HOEPA provisions that are so closely related to the MDIA provisions. In other words, if you can deliver early disclosures for loans secured by second homes by July 30, 2009, you can also deliver them for loans secured by principal dwellings. 

The press release includes a link to the rule. The final MDIA rule provides the specific HOEPA provisions that are now effective July 30, 2009.