As readers of this blog know, in January 2013, the CFPB adopted rules governing the Home Ownership and Equity Protection Act (HOEPA), valuations under the Equal Credit Opportunity Act (ECOA), and appraisals of Higher-Priced Mortgage Loans (HPML) under the Truth In Lending Act (TILA). While these rules do not take effect until January 2014, the CFPB is wasting no time warning financial institutions of their obligations under these rules. On May 2, 2013, the CFPB published three compliance guides for each of these rules targeted at small entities with limited legal and compliance staff. The guides can be found here: Guide for the 2013 HOEPA Rule; Guide for the ECOA Valuations Rule; and Guide for the TILA HPML Appraisal Rule. While billed as “Small Entity Compliance Guides,” mortgage lenders and servicers of all sizes could benefit from reviewing these materials to understand better the CFPB’s recent rules.
Presented in plain language and question-and-answer format, the guides offer a wide range of information from when the rules take effect to what is required to comply with the rules. Moreover, in recognition of the daunting task of complying with the myriad of new rules coming online in January, 2014, the CFPB includes “implementation tips” throughout the guides. In addition, each guide contains a section addressing practical implementation and compliance issues. On April 10, 2013, the CFPB issued similar guidance regarding its new Ability to Repay and Qualified Mortgage Rules.