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The following issues have recently come to our attention that may be of interest to you:
Federal Regulators Issue Final Model Privacy Notice Form
WASHINGTON — Eight federal regulatory agencies today released a final model privacy notice form that will make it easier for consumers to understand how financial institutions collect and share information about consumers. Under the Gramm-Leach-Bliley Act (GLB Act), institutions must notify consumers of their information-sharing practices and inform consumers of their right to opt out of certain sharing practices. The model form issued today can be used by financial institutions to comply with these requirements.
The Financial Services Regulatory Relief Act of 2006 amended the GLB Act to require the agencies to propose a succinct and comprehensible model form that allows consumers to easily compare the privacy practices of different financial institutions, and has an easy-to-read font.
The agencies conducted extensive consumer research and testing in developing the model form issued today. Then they solicited public comments and considered those comments in developing a model form that is easier for consumers to understand and use. The final rule provides that a financial institution that chooses to use the model form obtains a “safe harbor” and will satisfy the disclosure requirements for notices. The rule also removes, after a transition period, the sample clauses now included in the appendices of the agencies’ privacy rules.
The final model privacy form was developed jointly by the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Securities and Exchange Commission.
A copy of the form and rule are attached.
Secure and Fair Enforcement for Mortgage Licensing Act of 2008
– Final Rule
Registration of Residential Mortgage Loan Originators
(Part 365, Subpart B)
Summary:
The FDIC Board of Directors has approved the attached draft final rule implementing the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). The rule has been posted on the FDIC's Web site, but will not be published in the Federal Register until the other agencies involved in this rulemaking complete their review and approval of the rule. To the extent there are differences between the attached draft final rule and the version ultimately published by the agencies in the Federal Register, the FDIC will highlight those changes in a revised Financial Institutions Letter at the time of publication.
The following is a link to the Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2009/fil09064.html
Highlights:
The SAFE Act improves the accountability and tracking of residential mortgage loan originators (MLOs), enhances consumer protection, reduces fraud, and provides consumers with easily accessible information regarding the professional background of MLOs
.
The rule will implement the requirements of Section 1507 of the SAFE Act and will apply to insured state nonmember banks (including state-licensed insured branches of foreign banks), their subsidiaries and employees of such banks or subsidiaries who act as MLOs.
The rule:
- tracks the SAFE Act definition of an MLO and provides examples of when a person is or is not acting as an MLO;
- requires employees of insured state nonmember banks and their subsidiaries who act as MLOs to register with the Nationwide Mortgage Licensing System and Registry (NMLSR);
- requires institutions and MLOs to provide certain information to the NMLSR, including MLO fingerprints (to run a criminal background check);
- allows de minimis exceptions to the registration requirements for low-volume MLOs;
- requires appropriate written policies and procedures for ensuring compliance with the rule and establishes minimum standards for such policies and procedures; and
- explains how an MLO's unique identifier must be disclosed.
The draft final rule is publicly available and has been posted on the FDIC's Web site at http://www.fdic.gov/news/board/2009nov12no8.pdf. When finalized, this rule will be added as a new subpart B to Part 365 of the FDIC's Rules and Regulations (12 C.F.R. Part 365).
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The following issues have recently come to our attention that may be of interest to you:
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RESPA (Regulation X)
Revisions to Good Faith Estimate and HUD-1 Settlement Statement
Summary:
The U.S. Department of Housing and Urban Development (HUD) has amended Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA). The amendments relate primarily to the Good Faith Estimate (GFE) and HUD-1 Uniform Settlement Statement (HUD-1) and, with some exceptions, require mandatory compliance on January 1, 2010. FDIC examiners will begin examining for compliance with the amended provisions of Regulation X immediately.
Attached is supplemental information regarding the amendments.
Highlights:
As of January 1, 2010, compliance with the following provisions of Regulation X (RESPA) is mandatory:
- The new version of the Good Faith Estimate (GFE), which is subject to tolerances for accuracy.
- The expanded Uniform Settlement Statement (HUD-1), which promotes comparison of loan terms and settlement charges between the HUD-1 and GFE.
- Reimbursement to borrowers within 30 days of settlement of any overcharges outside permitted tolerances.
- The amended rule also provides that inadvertent or technical errors on the HUD-1/1A will not be deemed a violation of RESPA if a revised HUD-1/1A is provided to the borrower within 30 days of settlement.
The revised regulation is available at http://edocket.access.gpo.gov/2008/pdf/E8-27070.pdf.
Attachment:
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