CFPB Publishes User Friendly Compliance Guides

The Consumer Financial ProtectionrnBureau (CFPB) has just published three compliance guides to help both lendersrnand consumers understand some of the new rules issued by the agency.  The publications, called Small Entity Compliance Guides cover the 2013 Home Ownershiprnand Equity Protection Act (HOEPA) rules; Regulation B implementing the EqualrnCredit Opportunity Act (ECOA) rule, and the Truth-in-Lending (TILA) appraisalrnrule covering High Priced Mortgage Loans.</p

CFPBrnsays its goal is to provide an overview ofrnthe rules in a plain language and FAQ format to make the content morernaccessible and consumable for a broad array of industry participants,rnespecially smaller businesses with limited legal and compliance staff.</p

Eachrnguide does attempt to explain the rules and what is required of lenders underrneach in a straightforward manner which CFPB has managed, at least at a quickrnglance, to strip of most legalize.  The HOEPArnguide, for example contains sections defining high-cost mortgages, explains howrnto calculate fees and points for compliance, outlines disclosures andrncounseling requirements, and directs the reader to sources of additionalrnhelp.  </p

Atrnan average of almost 30 pages the compliance guides are still a bitrnoverwhelming but a lot of the page count is attributable to formatting – headingsrnin a large font and a high ratio of white space – apparently an attempt to bernmore reader friendly.</p

Accompanyingrneach compliance guide is a short consumer booklet explaining what the rule and whatrnit means to the consumer.  The four page TILArnconsumer guide for example lists the consumer protections available, definesrnflipping, outlines mortgages that are exempt from the rule, and directs thernconsumer to CFPB to report violations.   </p

CFPBrnsays that, although the guides give an overviewrnthey are not substitutes for the underlying rules.  It suggests lenders familiarize themselvesrnwith the complete original text.</p

Find the guides here: </p

Guide for the 2013 HOEPA Rule</p

Guide for the ECOA Valuations Rule</p

Guide for the TILA HPML Appraisal Rule</p

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