TRID Guidelines: What is MDIA?
TRID guidelines: We get a LOT of searches on our website for information regarding MDIA. It always catches us off guard because MDIA really isn’t a “thing” anymore. MDIA stands for the Mortgage Disclosure Improvement Act and it went into effect on July 30, 2009. In short, it brought us the seven-business day wait to close and the requirement to re-disclose an inaccurate APR at least three business days prior to closing for consumer, closed-end, dwelling-secured loans. These changes caused quite a stir at that time.
Fast forward to 2013 and the issuance of a Final Rule for the Integrated Mortgage Disclosures (TRID) under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), which took effect on October 3, 2015. These rules completely changed the disclosure requirements for consumer-purpose, closed-end loan applications secured by real property (aka dirt).
What some may not realize is that both of the requirements created by MDIA were written into the existing TRID guidelines. Thus, MDIA is really a moot issue at this point. Here is a blog we put out a few years back, that explains this in more detail.
Want to learn more about the TRID requirements? If so, we have a wide variety of webinars available now OnDemand. From TRID Construction Loans, TRID for Beginners, Auditing TRID and TRID Changed Circumstances, we’ve got you covered. Also, be sure to check out our three-part webinar series, “TRID From A – Z”, beginning on November 2nd!
Proposal Issued on Small Business Lending Data Collection (Dodd-Frank Section 1071)
The CFPB issued a proposed rule regarding Small Business Lending Data Collection under Section 1071 of the Dodd-Frank Act.
Based on the proposal, an institution will be subject to the rule if it originated at least 25 covered credit transactions to small businesses in each of the prior two years. A “small business” would be one with no more than $5 million in gross annual revenues in the prior fiscal year.
Covered institutions would need to collect and report certain data for small business credit applications. This includes information specific to the credit request, such as the purpose and amount; information specific to the business, such as the number of workers and time in business; and information on the demographics of the principal owners or ownership status. Data would also need to be reported annually to the CFPB. Institutions must limit access to the demographic information, as well as minority or women-owned status, unless it’s not feasible to do so and notice is provided.
The CFPB provided a Summary and Chart of the proposed data points. There is only a 90-day comment period following the proposal’s publication in the Federal Register.
If you want to learn more, we will be covering this in the lending portion of our Virtual Lending Compliance Conference Series and will also be presenting a Small Business Lending Data Collection webinar on September 29th 2021.
Credit Card Data Submission Changes
Just in case you missed it! On August 20, 2021, the CFPB issued new technical specifications for complying with the credit card agreement and data submission requirements found in Regulation Z.
If you are required to submit credit card agreements to the CFPB as required by 12 CFR 1026.58, you must use the CFPB’s “Collect” website beginning with any submissions due in 2022.
If you participate in the CFPB’s Terms of Credit Card Plans (TCCP) survey, the “Collect” website must also be used to submit survey data beginning with the February 14, 2022 deadline. Use of this website was previously optional for survey responses.
You can register for “Collect” here if you have not previously done so. Those who are required to submit credit card agreements on a quarterly basis must register by November 1st.
You can also review the technical specifications here.
Some things to be aware of…
The CFPB recently updated its Mortgage Servicing Small Entity Compliance Guide to incorporate its mortgage servicing Final Rule that’s effective August 31st and its 2020 Interim Final Rule regarding loss mitigation options based on an incomplete loss mitigation application. The revised Guide also clarifies that large servicers can use multiple electronic systems to create a servicing file, as long as the necessary documents and data can be put together within five days.
The CFPB also announced that final rules under The Fair Debt Collection Practices Act (FDCPA) will take effect as originally scheduled on November 30, 2021, as it determined any delay is unnecessary. As a reminder, one of these rules focuses on communications and behaviors considered to be unfair, deceptive and/or abusive. The other rule clarifies disclosure requirements and prohibitions related to time-barred debt.
If you’re a national bank or federal savings association, the OCC issued Bulletin 2021-35 to provide/update the names and addresses to be used for public notices under The Community Reinvestment Act (CRA), Fair Housing Act posters and adverse action notices under The Equal Credit Opportunity Act (ECOA)/Regulation B. Any necessary changes are to be made within 90 days of the August 5th bulletin.
FATF Report on Environmental Crime
The Financial Action Task Force (FATF) recently released a report on Money Laundering from Environmental Crime. Environmental crime is something many don’t think about but it generates around $110 – $281 billion each year which makes it one of the most lucrative of all criminal activities. It’s also considered low risk and high reward because of legal inconsistencies that don’t adequately address the financial aspects of the crimes.
The report focuses specifically on laundering money from forestry crime (e.g., illegal logging, illegal land clearance, etc.); illegal mining, and waste trafficking. These three areas alone are believed to account for about two-thirds of environmental crime proceeds. The report also outlined common characteristics of these three types.
Environmental crime affects the planet, public health & safety, human security, and social & economic development. So, the impact goes well beyond the financial considerations. Unfortunately, there have only been limited efforts to identify, investigate and prosecute money laundering activity related to environmental crime. Developing a sufficient understanding of the money laundering risks associated with environmental crimes is an essential first step in developing a broader strategy to tackle this type of crime.
For more on this report from FATF, check out our August edition of Banking on BCC.