Once again the Bureau of Consumer Financial Protection is opening the proposed rules for Regulation Z (Truth in Lending) for public comment. The revisions reflect the amendments to Truth in Lending Act (TILA) that were made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). All comments must be received on or before October 16, 2012.
The proposed rule addresses the current loan originator compensation provisions including the upfront discount points, origination points, and circumstantial fees on consumers. Additionally the proposal implements additional requirements by the Dodd-Frank Act concerning proper qualification and registration or licensing for loan originators. The proposal also includes the restrictions on mandatory arbitration and the financing of certain credit insurance premiums. Lastly additional guidance regarding restrictions on loan originators compensation practices including direction on the application to certain profit-sharing plans and the proper analysis of payment to the loan originators based on non-term factors.