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Fed ends development of three Reg Z mortgage rule changes
WASHINGTON (2/2/11)--The Federal Reserve Tuesday announced that it would halt work toward finalizing three pending mortgage rulemakings under Regulation Z. Credit Union National Association (CUNA) President/CEO Bill Cheney had asked the Fed to drop these proposals and impose a moratorium on any further rulemakings on issues that will be under the authority of the Consumer Financial Protection Bureau as of July 21, 2011. Although portions of the Fed proposals would not be affected by the CFPB's work, the Fed said that altering its regulations in a piecemeal fashion “would be of limited benefit, and the issuance of multiple rules with different implementation periods would create compliance difficulties.” A key provision in one of the now-dropped Reg Z proposals would have seriously jeopardized credit protection products, such as credit life, disability and related products. The other proposals addressed closed-end mortgage loans and home equity lines of credit under the Truth in Lending Act (TILA). CUNA worked closely with CUNA Mutual Group and its in its advocacy efforts with the Fed, particularly regarding the credit protection products. Also, about 4,000 comment letters were generated to the Fed through Operation Comment and the leagues. CUNA’s Cheney noted that CUNA had worked hard to pursue this result and also commended credit unions, the leagues and CUNA Mutual CEO Jeff Post for their efforts. “We’re gratified the Federal Reserve listened to the voices of credit unions, Leagues and CUNA,” Cheney said. Because the CFPB will assume rulemaking authority under Reg Z and 17 other consumer protection rules in July, these issues could resurface there. CUNA will be closely monitoring developments at the CFPB on these and all other issues affecting credit unions. Use the resource link below for more information from the Fed.
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