Compliance Blog

Last week, the Federal Reserve released a proposed rule to implement changes mandated by the Mortgage Disclosure Improvement Act.  (This wasn't the Reg Z issuance we've been dreading.)  And remember: this is only a proposal.  There's nothing to do yet, other than give your wonderful comments to NAFCU when we issue our Alert.  Here's an overview:

 The MDIA requires creditors to give good faith estimates of mortgage loan costs ("early disclosures") within three business days after receiving a consumer's application for a mortgage loan and before any fees are collected from the consumer, other than a reasonable fee for obtaining the consumer's credit history.  These requirements are consistent with the Board's July 2008 final rule which applied to loans secured by a consumer's principal dwelling.  The MDIA broadens this requirement by also requiring early disclosures for loans secured by dwellings other than the consumer’s principal dwelling, such as a second home.   (Emphasis added)

In addition, the proposed rules would implement the MDIA's requirements that:

• Creditors wait seven business days after they provide the early disclosures before closing the loan; and
• Creditors provide new disclosures with a revised annual percentage rate (APR), and wait an additional three days before closing the loan, if a change occurs that makes the APR in the early disclosures inaccurate beyond a specified tolerance.
  The proposed rules would permit a consumer to expedite the closing to address a personal financial emergency, such as a foreclosure.  Under the MDIA, the proposed rules would become effective on July 30, 2009.

The notice that will be published in the Federal Register is attached.  The public comment period ends January 23, 2009.

Read the Fed's Press Release here.
Read the NAFCU Today article here. 
Read the actual proposal here. 

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NCUA has released its most recent NCUA Newsletter.  This issue summarizes the last board meeting and has some nice financial data concerning our industry.  Access it here.