On March 10, 2023, the CFPB announced that it is conducting a review of Regulation Z’s Mortgage Loan Originator Rules (Loan Originator Rules) pursuant to section 610 of the Regulatory Flexibility Act. As part of this review, the Bureau is seeking comment on the economic impact of the Loan Originator Rules on small entities.
Regulation Z, which implements the TILA, imposes certain requirements on loan originator compensation, qualification and registration/licensing loan originators, compliance procedures for depository institutions, mandatory arbitration, and the financing of single premium credit insurance. According to the CFPB, inputs from the public can help the Bureau in determining whether the Loan Originator Rules should be continued without change or amended or rescinded to minimize any significant economic impact of the rules upon a substantial number of such small entities.
In particular, the CFPB plans to review the following:
Regulation Z’s Mortgage Loan Originator Rules, including the Board’s 2010-2011 Rules and the Bureau’s 2013 Rules;
The market structure and participants, the mortgage origination process, and the loan originator compensation structure;
Bureau resources and analysis; and
Previous input to the bureau.
The CFPB asks the public to comment on the impact of Regulation Z’s Mortgage Loan Originator Rules on small entities by reviewing the following factors:
The continued need for the Rules based on the stated objectives of applicable statutes and the Rules;
The complexity of the Rules;
The extent to which the Rules overlap, duplicate or conflict with other Federal rules, and, to the extent feasible, with State and local governmental rules;
The degree to which technology, market conditions, or other factors have changed the relevant market since the rule was evaluated, including:
How the impacts of the Rules as a whole, and of major components or provisions of the Rules, may differ by origination channel, product type, or other market segment;
The current scale of the economic impacts of the Rules as a whole, and of major components or provisions of the Rules, on small entities; and
Other current information relevant to the factors that the Bureau considers in completing a section 610 review.
The CFPB’s notice of section review and request for comment can be found here.
