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The following are regulatory changes of note that bankers should keep in mind:
Effective Jan. 1, the dollar amount of the fee-based trigger under the truth in Lending Act (Regulation Z) will increase to $583.
This adjustment does not affect the new rules that the Board adopted in July 2008 for higher-priced mortgage loans, the coverage of which are determined using a different rate-based trigger.
The Home Ownership and Equity Protection Act of 1994 restricts credit terms, such as balloon payments, and requires additional disclosures when total points and fees that the consumer pays exceed either the fee-based trigger or 8 percent of the total loan amount, whichever is larger.
If your institution is engaging in broker-related activities, see the Fed’s Small Entity Compliance Guide issued earlier this year.
The guide is issued under Regulation R, which implements certain key exceptions for banks from the term “broker” The exceptions include:
Any bank that wants to rely on one of these exceptions or exemptions to the definition of broker should review and understand the terms, limits and conditions to the particular exception or exemption.