Today the President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act. The effective dates vary, with some being 12 – 18 months after enactment. Here are some highlights from a compliance perspective:
Banks/credit unions that together with their affiliates have less than $10 billion in assets receive a safe harbor under the ATR requirements for loans they keep, as long as the loan meets restrictions with prepayment penalties and points and fees; does not have negative amortization or an interest-only feature. To be eligible, debts, income and financial resources must be considered and verified. There are also circumstances in which a loan can qualify for the safe harbor even if it is transferred – for example, if the transfer is to a subsidiary.
For HMDA Banks, if you made less than 500 closed-end or open-end dwelling-secured loans in either of the prior two years, the Act is written so that you would no longer need to report new data fields, such as points and fees, property value, introductory rate period, non-fully amortizing features, etc. Specifically, loan type, owner occupancy status, census tract, income, and demographic information would seem sure to remain…from there, we will have to wait and see how the regulation will look. There is also a “qualifier” written in, that you would still need to report all data fields if your CRA rating is Needs to Improve or Substantial non-compliance. Now, we feel it only makes sense that the reporting requirements change with a new calendar year but the effective date for this one is not yet clear.
There also looks to be changes to the HPML Escrow requirements and even the Expedited Funds Availability Act.
So, once again change is coming. Even if that change is “regulatory relief”, there is bound to be confusion along the way. Don’t worry, we will be here to guide you throughout the process. For now, you can communicate that yes, relief is coming, but at this point, we don’t necessarily know exactly how it will all look or when it will all happen, as regulations will need to be issued to implement some of the changes.