The CFPB Amends Ability-to-Repay and Qualified Mortgage Standards
On Wednesday, May 29, 2013, the Consumer Financial Protection Bureau (the “CFPB”) issued amendments to Regulation Z, which implements the Truth in Lending Act (“TILA”). TILA Section 129C, as added by Sections 1411, 1412, and 1414 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), generally requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay a mortgage loan and creates a presumption of compliance with these ability-to-repay requirements for certain loans designated as “qualified mortgages.” On January 10, 2013, the CFPB issued final rules under Regulation Z implementing these ability-to-repay requirements and qualified mortgage provisions.
The new amendments provide an exemption to these requirements for creditors with certain designations, loans pursuant to certain programs, certain nonprofit creditors, and mortgage loans made in connection with certain Federal emergency economic stabilization programs. The amendments also provide an additional definition of a qualified mortgage for certain loans made and held by small creditors and a temporary definition of a qualified mortgage for balloon loans. The amendments also modify the requirements regarding the inclusion of loan originator compensation in the points and fees calculation.
Read the CFPB rule
The SEC Issues FAQ on Conflict Mineral Rules
On Thursday, May 30, 2013, the Securities and Exchange Commission (the “SEC”) released responses to Frequently Asked Questions (“FAQs”) providing guidance on various aspects of Exchange Act Section 13(p), Rule 13p-1, and Item 1.01 of Form SD relating to the disclosure of the use of certain conflict minerals from the Democratic Republic of the Congo or adjoining countries. The FAQs addresses:
The breadth of covered activities and products;
Tools, machines, and other equipment used by manufacturers; and
Effects on Form S-3e eligibility.
Read the SEC FAQ
The CFTC Adopts Swap Grouping and Participant Privacy Rules
On Friday, May 31, 2013, the Commodity Futures Trading Commission (the “CFTC”) adopted new final rules implementing certain statutory provisions enacted by Title VII of the Dodd-Frank Act. In accordance with section 727 of the Dodd-Frank Act, the CFTC adopted rules to define the criteria for grouping swaps into separate swap categories and to establish methodologies for setting appropriate minimum block sizes for each swap category. The CFTC also adopted final rules to prevent the public disclosure of the identities, business transactions, and market positions of swaps market participants.
Read the CFTC rule
The CFTC Adopts Swap Exchange Facility Rules
On Tuesday, June 4, 2013, the CFTC adopted new final rules and guidance implementing certain statutory provisions enacted by Title VII of the Dodd-Frank Act. The final rules and guidance apply to the registration and operation of a new type of regulated entity called a swap execution facility (“SEF”). The final rules and guidance implement the Dodd-Frank Act's new statutory framework that, among other requirements, added Sections 5h and 2(h)(8) to the Commodity Exchange Act (the “CEA”), which concern the registration and operation of SEFs and the execution of swaps on SEFs. The CFTC also adopted final rules to establish a phased in compliance process for a designated contract market or SEF to make a swap under the CEA’s trade execution requirements.
Read the CFTC rule 2013-12242 and 2013-12250