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ABA Victory: Fed Opts Not to Finalize Three Pending Reg Z Proposals

Posted on 2/2/2011

ABA achieved a long-sought victory yesterday, when the Federal Reserve announced that it doesn't expect to finalize three pending rules under Regulation Z (Truth in Lending Act) before transferring the authority for the rulemaking to the Consumer Financial Protection Bureau. The three proposed rules were part of the Fed's review of its mortgage-lending regulations under TILA, and they were issued in two phases between August 2009 and September 2010.

ABA had urged the Fed to delay the rulemaking on the proposals in eight letters and numerous meetings with agency staff members in recent months. ABA argued continuously that all new regulatory efforts should be postponed to achieve better coordination with -- and proper integration into -- the broader mortgage-reform requirements under the Dodd-Frank Act.

ABA had asked the Fed to work with the new Consumer Financial Protection Bureau to develop a comprehensive plan for disclosure reform that includes an agenda and timetable to propose, finalize and implement all mortgage disclosure revisions by all agencies with a stake in mortgage lending.

The Fed explained in a press release that because the TILA proposals would substantially revise the disclosures for mortgage transactions, any new disclosures the agency adopted would be subject to the CFPB's additional revisions in carrying out its mandate to combine TILA and Real Estate Settlement Procedures Act disclosures. The CFPB also could propose a combined TILA-RESPA disclosure rule before any new Fed-issued disclosure requirements could be fully implemented, the agency said. Read the Fed's press release. For more information, contact ABA's Rod Alba.

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