The Division of Banks has released final amendments to 209 C.M.R. 32.00, Disclosure of Consumer Costs and Terms, which implements Chapter 140D of the General Laws of Massachusetts, the state Truth in Lending statute. The amendments, which became effective on January 2, provide that compliance with certain provisions of the regulations of the Consumer Financial Protection Bureau (CFPB) implementing TILA constitutes compliance with certain provisions of 209 C.M.R. 32.00, including the CFPB's Ability to Repay and Qualified Mortgage standards. The Massachusetts Truth in Lending statute and regulations are applicable to Massachusetts-chartered banks, credit unions, licensees and other creditors doing business in Massachusetts. The Division amended 209 C.M.R. 32.00 to incorporate future changes to TILA and the CFPB's Truth in Lending regulations while preserving certain Massachusetts requirements that are more advantageous to consumers. Specifically, the amended rule provides that compliance with any provisions of TILA, the CFPB's Regulation Z and the Official Staff Commentary, which does not conflict with Chapter 140D, 209 C.M.R. 32.00 or an advisory ruling of the Commissioner of Banks, will be deemed to be compliance with Chapter 140D. However, certain differences between TILA and Chapter 140D that provide more protection to consumers are preserved. For example, the rescission period during which a borrower may exercise his or her right to rescind certain home mortgage loans if the lender fails to satisfy applicable disclosure requirements is four years under Chapter 140D, as opposed to three years under TILA.
Nutter Notes: The Massachusetts bank modernization law (please see Report #1 above) also provides a mechanism intended to reduce conflicts between the Massachusetts and federal Truth in Lending regimes. In cases where future amendments to TILA or its implementing regulations conflict with existing provisions of Chapter 140D or 209 C.M.R. 32.00, lenders that comply with the federal law and regulations will be deemed to be in compliance with Massachusetts law unless and until the Commissioner of Banks adopts regulations that are substantially similar to or afford more protection to consumers than federal law and regulations. The new law also gives the Commissioner of Banks authority to waive requirements of Chapter 140D and 209 C.M.R. 32.00 under certain circumstances. Specifically, the bank modernization law provides that, if a provision of TILA, the CFPB's Regulation Z, the Official Staff Commentary or a disclosure or model disclosure form is in conflict with a provision of Chapter 140D or 209 CMR 32.00 and if the Commissioner determines that the federal provision is not substantially less protective of consumers, then the Commissioner may issue a written waiver of that provision of Chapter 140D or 209 CMR 32.00 applicable to Massachusetts-chartered banks, credit unions, licensees and other creditors doing business in Massachusetts.