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FOS Blog

17 Sep

EGRRCPA – Let’s Take Stock!

EGRRCPA – Let’s Take Stock!

The “Economic Growth, Regulatory Relief, and Consumer Protection Act” was signed into law on May 24, 2018.  It had many moving parts, some effective upon passage and others where regulations were first needed.  Let’s explore the status of some of these requirements one year later.

Qualified Mortgages – Section 101 allowed for any mortgage that was held within a bank’s own portfolio to be considered a Qualified Mortgage for any institution with less than $10 billion in assets (some limitations apply).  Regulations were needed but have not yet been proposed so an institution would be at risk to adopt this standard earlier than allowed.

Appraisals for Rural Areas – The intent of Section 103 was to allow relief in rural areas where appraisers are scarce.  It allowed that for transactions under $400,000, if a lender could not find an appraiser after contacting 3 appraisers within 5 business days, they could use an evaluation.  An interagency notice of proposed rulemaking was published on December 7, 2018 with comment period expiring on February 5, 2019.  No notice of final rule yet.

HMDA Relief – Section 104 would provide additional exemptions for small volume reporters.  On August 31, the CFPB issued an interpretive rule for 2018 data filing and at the same time proposed alternative permanent thresholds.  One would raise the current 25 loans to identify institutions subject to reporting to either 50 or 100 closed end loans in either of the 2 preceding years.  It would adjust the open-end lines of credit threshold to 500 through 1/1/22 and then fix it permanently at 200 lines.  Comments were due on 6/12/19, but there is no final rule yet.

SAFE Act Amendment – Section 106 which permits Mortgage Loan Originators (MLOs) to continue to engage in MLO activities when moving from a depository to a non-depository institution or from one state to another became effective by statute on November 24, 2019 – just in time for year-end registrations.

3-Day wait when rate lowered – There has been an outstanding question regarding TRID compliance when a creditor lowers the APR after the initial Closing Disclosure is issued.  Section 109 clarified that if the creditor extends a second offer of credit with a lower APR, the transaction can be consummated without the 3-day waiting period.  The rule was effective upon enactment; CFPB’s TRID FAQs have been updated with this circumstance (not binding); TILA revisions were expected but have not been implemented yet.

Veterans Medical Debt – Section 302 required the VA to establish a database whereby consumer reporting agencies could verify veterans’ medical debts and for the FTC to develop regulations for consumer reporting agencies to do so.  It was effective one year after enactment (May 24, 2019) but has not yet been accomplished.  It would allow VA medical debt to be hidden in credit reports for one year (up from 6 months) due to the slow billing & collections process.

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