The Federal Reserve Board issued on May 12 the final rules for Regulation Z (Truth in Lending) that revise disclosure requirements for mortgage loans. The final rules implement the Mortgage Disclosure Improvement Act (MDIA), which was enacted in July 2008 as an amendment to the Truth in Lending Act.
The new final rules are similar to the Reg Z rules finalized in July 2008, except the MDIA is broader and includes more. The new rules are designed to ensure that consumers receive cost disclosures earlier in the mortgage process. Under the MDIA, creditors must comply with the new provisions starting on July 30, 2009. The regulations apply to dwelling-secured consumer loans for which a creditor receives an application on or after July 30, 2009.
Among the requirements, creditors must:
The rules would permit a consumer to expedite the closing to address a personal financial emergency, such as a foreclosure.
Bank holding companies can now include in their Tier 1 capital, without restriction, senior perpetual preferred stock issued to the U.S. Treasury Department under the Troubled Asset Relief Program (TARP). The Federal Reserve Board issued the final rule on May 22, after adopting the interim final rule in October 2008.
In addition, the Board announced the adoption of an interim final rule that will let bank holding companies that are S-Corps or that are organized in mutual form to:
The Federal Reserve Board decided in March to delay full implementation of final rules that place new limits on the inclusion of trust preferred securities and other restricted core capital elements in tier 1 capital of bank holding companies. The Board did this because of stress on the financial markets and efforts of bank holding companies to increase their capital levels. Because of the delay, all bank holding companies may include cumulative perpetual preferred stock and trust preferred securities in tier 1 capital up to 25 percent of total core capital elements. Read the final rules.
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