Compliance Blog

Written by Eliott C. Ponte

CFPB Issues Interpretive Rule on Homeownership Counseling Requirements.  The CFPB issued a final interpretive rule, amending its 2013 guidelines, to assist lender compliance with RESPA and TILA homeownership counseling requirements. 

Under RESPA, credit unions must provide applicants for a federally related mortgage loan with a clear and conspicuous written list of certified homeownership counselors.  12 C.F.R. 1024.20(a)(1).  RESPA states a credit union may use one of two methods for generating the required list.  First, a credit union can use a tool developed and maintained by the CFPB.  Second, a credit union can use data made available by the CFPB or HUD, provided the data are used in accordance with instructions provided with the data.  12 C.F.R. 1024.20(a)(1)(ii).  The interpretive rule describes instructions for credit unions to use in complying with the second method for generating a list.  The interpretive rule addresses the number of counselors that must appear on a list of counselors (according to the CFPB, listing ten housing counseling agencies ensures fairness among housing counseling agencies), the use of zip codes to generate a list of counselors, counselor contact information, and combining the list of counselors with other discourses. 

TILA prohibits a credit union from making a high-cost mortgage loan (as defined by HOEPA) unless it receives written certification that the member has obtained mortgage counseling from an approved counselor.  The interpretive rule clarifies the qualifications necessary to provide high-cost mortgage counseling, and provides guidance on the issue of credit union participation in counseling. 

With regard to the credit union’s participation in counseling, it is the CFPB’s position that “counselor independence and impartiality, which the anti-steering provision seeks to preserve, may be adversely affected by a concern that another counselor may be selected or the content of the counseling influenced if the counselor requests that the [credit union] not listen to the counseling and the [credit union] does not agree.”  See final interpretive rule page 12.  Therefore, the interpretive rule states that credit unions will “comply with the anti-steering provision if a counselor is allowed to request that the creditor not participate or listen on the call.”  Id.  However, the CFPB is not enacting a prohibition on credit union’s participation, as the CFPB states that a “counselor ... is allowed to request that a [credit union] participate in a call or a portion of a call.”  Id. 

CFPB Finalizes One-Year Suspension of TILA Requirement for Quarterly Submission of Credit Card Agreements.  Last week the CFPB issued a final rule adopting a one-year suspension of its own regulation that requires certain credit card issuers to send their credit card agreements to the CFPB each quarter. Under the final rule, credit card issuers will not be required to submit agreements that would otherwise have been due to the CFPB by the first business day on or after April 30, July 31, and October 31 of 2015, and January 31, 2016.  The suspension does not affect the requirement for issuers to post their credit card agreements on their own publicly available websites.  12 C.F.R. 1026.58(d).

The rationale behind the suspension of quarterly submissions is so the CFPB can develop a more streamlined and automated electronic submission system. In its statement, the CFPB said the new system should enable faster posting of new and revised agreements on its website.

Credit card issuers must resume submitting credit card agreements on a quarterly basis to the CFPB starting on April 30, 2016.  In lieu of providing new and amended agreements and notice of withdrawn agreements for the April 30, 2016 submission, issuers are permitted to submit to the CFPB a complete, updated set of agreements offered to the public as of the calendar quarter ending March 31, 2016.  See comment 58(c)(1)-3.