2009-2010 Regulatory and Legislative Review & Preview

Presented to the CUCP October 8, 2009

What About…?

• Risk-based pricing notices – NCUA and others (Comments were due by 8/18/08.)

– FACTA: Required when a credit report is used to grant credit to a consumer on terms “materially less favorable than the most favorable terms available to a substantial portion of consumers by that creditor.”

• Revised Model Privacy Notices – NCUA and others (Comments were due 5/29/07. In April 2009 SEC reopened comments until 5/20/2009.)

May 2009

• May 1st - Revised Home Valuation Code of Conduct – Applies to all loans originated after effective

date that are purchased by Fannie or Freddie.– Q&A issued 7/22/2009.

• May 26th – NCUA Share Insurance coverage of $250,000 continued until 12/31/2013.– Official signage choices?

June 2009

• June 15th - CA Foreclosure Prevention Act (ABX2 7, SBX2 7)– Provides specified borrowers an additional 90

days in the foreclosure process, unless the mortgage loan servicer responsible for servicing the borrower’s loan establishes that it has implemented a “comprehensive loan modification program,” and the servicer obtains an exemption from the DOC, the DFI, or the DRE

July 2009

• July 2nd – Reg D: Definition of savings deposit (Fed)– Amends definition of “savings deposit” to

eliminate sub-limit of three transfers or withdrawals that can be made by check, debit card, etc. In other words, all “convenient” transfers limited to six per month.

July 2009

• July 30th – Reg Z: MDIA (Fed)– Broadens and adds to requirements early mortgage

disclosures (i.e., GFE)– Adds waiting period between disclosure and loan

closing (7 business days)

• July 31st – SAFE Act Compliance. See Spring/Summer 2010.

August 2009

• August 20th – Reg Z: CARD Act provisions (Fed)– 45 day notice of APR increases, and– Sending periodic statements at least 21 days

before the due date

September 2009

• September 12th - Acknowledgements for SAR submissions (FinCEN)– SAR narratives?

• September 18th - International ACH Transaction (IAT) Rules and Format (NACHA)– FIs must be able to identify IAT payments and

perform due diligence as required by OFAC.

October 2009

• October 1st - Reg Z: Unfair or Deceptive Mortgage Lending & Advertising (Fed)– Applies to “higher-priced mortgages”– Advertising provisions apply to HELOCs and

closed-end mortgage loans – HMDA amended to match

October 2009Changes to Reg Z Advertising

• HELOCs– Balloon payments– Tax implications– Promotional rates and payments– TV and radio ads– Clear & conspicuous: promotional rate or

payment– “Reasonably current” index and margin

October 2009Changes to Reg Z Advertising

• Closed-end RE– Clear and conspicuous standard– Adds new section on dwelling-secured – TV and radio/reasonably current margin and index/tax

implications– Misleading comparisons/statements, or gov’t.

endorsements– Using current lenders name in ad not sent by current

lender

November 2009

• November 1st – ID theft “red flag” guidelines: extension of enforcement for state-licensed CUs (FTC)

• November 15th – Last date to file new Form 990 for Tax Year 2008 (IRS)

December 2009

• December 1st - Reg GG: Unlawful Internet Gambling Enforcement (Fed) – Commercial/business accounts

• Notify all that restricted transactions are prohibited• Identify, block, prohibit, or restrict prohibited transactions • One year delay?

• ??? – Reg CC: Consolidation of check processing centers (Fed)– Down to 5 centers; last paper check processed by LA

will be 11/13

January 2010

• January 1st – RESPA: New GFE Form; modifications to HUD-1 & HUD-1A (HUD)– GFE: three-page standardized form. Various

permissible tolerances (zero, 10 percent, and unlimited) regarding fees charged by a lender at settlement as compared to the fee amount stated on the GFE. Includes a “trade-off” table and a mortgage shopping chart. Must be given within 3 business days of completed application. No charge except credit report fee until after GFE given.

January 2010

• January 1st – TIS/Part 707: Overdraft privilege (NCUA) – Disclosure of MTD and YTD O/D fees (paid

and unpaid) and available balance info • Reg E: proposal regarding opt-in/out, plus debit

hold provisions (Comments were due by 3/30/2009.)

January 2010

• January 1st - Reg S: Reimbursements under RTFPA (Fed)– Personnel fees go up– No $0.25 per page permitted if doc electronically

stored

• January 1st - CA AB 1160: Translation of mortgage contracts negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean

• January 1st - CA AB 329: Reverse mortgages

February 2010

• February 14th – Reg Z: Private education loans (i.e., non-federally guaranteed student loans) (Fed).

• February 22nd – Reg Z: CARD Act provisions!!! (Fed)– What provisions?– All open-end or credit cards only?– Move up July 1st Reg Z open-end?– Expedited compliance (i.e., December ’09)?

Spring/Summer 2010 (?)

• SAFE Act: Registration of mortgage loan originators (NCUA Part 761)– Registration vs. licensing– Comment period ended August 10, 2009.

Final rule expected by year-end.– 180 day delay in implementation after the

Registry is up and running– CA AB 34 – likely vehicle for CA’s licensing

compliance?

July 2010

• July 1st – NCUA Part 717: Accuracy of credit information (NCUA and others)– Section 312 of FACTA– Must establish and implement policies and

procedures regarding “accuracy & integrity” of info provided to credit bureaus

– Ability of consumer to dispute directly with furnisher of info

July 2010

• July 1st – Reg AA: Unfair or deceptive credit card practices (Fed) – status?

• July 1st – Reg Z: Disclosures for open-end/credit cards (Fed) – status?– Interplay with CARD Act?– MFOEL (e.g., LoanLiner)?

August 2010

• August 22nd – Reg Z: Remaining CARD Act provisions (Fed)– Assessment every six months after an APR is

increased to determine if the rate should then be decreased (look-back is January 1, 2009)

– Penalty fees must be “reasonable and proportional”

– Gift card provisions

Proposed Regs

• Proposed Interagency Appraisal & Eval. Guidelines (Comments due 1/20/09.)

• NCUA: Corporate restructuring (Comments due 4/6/2009. Proposed rule - 11/19/2009)

• FTC: 2 ANPRs regarding mortgage acts and practices (comments were due by 7/15 & 7/30)– One ANPR addresses activities that occur through the mortgage

process (advertising, origination, appraisals, etc.)– The other addresses loan mod and foreclosure prevention

practices

Proposed Regs

• Interagency: Flood Q&A Proposal (Comments due 9/21/2009)

• Reg Z: Closed-end mortgage (Fed – comments due 12/24/2009

• Reg Z: HELOCs (Fed – comments due 12/24/2009)

Federal & State Legislative Issues

• Federal:– H.R. 3380 – CU MBLs– H.R. 2382 - Interchange– H.R. 3639 – Expedited CARD Act compliance– Mortgage “cram-down” in BK– Consumer Financial Protection Agency– Consolidation of Regulators

• CA:– Mortgage modifications– Review of tax structure– AB 33: consolidation of regulators

Questions?

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