Reg Z...Again; What Have Regulators Learned?
OK, maybe I need to start letting people know when Reg Z doesn't change.
On Friday, the Fed approve another batch of final rules that amends Regulation Z. Read all about it here.
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.
In addition, the 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 business days before closing the loan, if a change occurs that makes the APR in the early disclosures inaccurate beyond a specified tolerance.
The rules would permit a consumer to expedite the closing to address a personal financial emergency, such as a foreclosure.
Effective date: July 30, 2009.
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Fed Chairman Ben Bernanke gave a speech on what regulators have learned during the current crisis. Read his remarks here.  Here's my condensed version. "We learned a heck of a lot about the importance of safety and soundness and risk management."  How well does your credit union measure risk? I bet regulators will lean more on risk management in the years to come.