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4 Webinars, 4 Perspectives Implications of Dodd-Frank Act

4 Webinars, 4 Perspectives Implications of Dodd-Frank Act. PART 1: ANTI-STEERING & LOAN OFFICER COMPENSATION. PART 2: IMPACT TO HEDGING. PART 3: IMPLICATIONS FOR DOCUMENT COMPLIANCE December 16. PART 4: IMPACT TO YOUR LOS December 21. Ask Questions.

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4 Webinars, 4 Perspectives Implications of Dodd-Frank Act

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  1. 4 Webinars, 4 Perspectives • Implications of Dodd-Frank Act • PART 1: • ANTI-STEERING & LOAN OFFICER COMPENSATION • PART 2: • IMPACT TO HEDGING • PART 3: • IMPLICATIONS FOR DOCUMENT COMPLIANCE • December 16 • PART 4: • IMPACT TO YOUR LOS • December 21

  2. Ask Questions

  3. Implications of Dodd-Frank Act • Part 3: Implications for Document Compliance • December 16, 2010

  4. Thomas Walter Wolters Kluwer Financial Services Compliance Consultant, Professional Services  6815 Sauk View Drive, Saint Cloud, MN,  56303 320.240.5533 tel 320.240.4540 fax Tom.Walter@wolterskluwer.com • Tom Walter recently returned to Wolters Kluwer Financial Services as a Compliance Consultant in Professional Services. Tom’s current responsibilities include developing new consulting services, supporting consulting engagements, and providing specialized research and fulfillment services. Most recent activities have centered on multistate program development and compliance education focusing on Truth-in-Lending and the Dodd Frank financial reform law. • In addition to his experience at Wolters Kluwer Financial Services, Tom has years of banking and bank regulatory experience, including many years as a field examiner, compliance officer and compliance vice president. • Tom earned his Juris Doctor degree from William Mitchell College of Law.

  5. Agenda • Dodd-Frank Introduction • Bureau of Consumer Financial Protection • Regulatory review • Combined RESPA TIL disclosures • Changes in Preemption • Regulatory Improvements • Conforming Amendments • Questions and Answers

  6. Dodd-Frank: A Brief Introduction • Passed July 21, 2010 • 2,300+ pages • 16 titles • Eliminates OTS • Most rulemaking goes to new Bureau

  7. Bureau of Consumer Financial Protection • Establishment of Bureau • Consumer Financial Product or Service • Covered Person • Ombudsman • Enumerated Consumer Laws

  8. BCFP Enumerated Consumer Laws • Alternative Mortgage Transactions Parity Act (AMTPA) • Consumer Leasing • Electronic Funds Transfer Act • Equal Credit Opportunity Act • Fair Credit Billing Act • Fair Credit Reporting Act • (With exceptions) • Home Owners Protection Act • (HOPA) • Fair Debt Collection Practices Act • Federal Deposit Insurance Act • Gramm-Leach-Bliley • Home Mortgage Disclosure Act • Home Ownership and Equity Protection Act (HOEPA) • Real Estate Settlement Procedures Act • SAFE Mortgage Licensing Act • Truth In Lending Act • Truth In Savings Act • Omnibus Act of 2009 • Interstate Land Sales Full Disclosure Act

  9. General Powers of the Bureau • Purpose • To implement and, where applicable, enforce federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services, and that markets for consumer financial products and services are fair, transparent and competitive

  10. Bureau: Transfer of Functions and Personnel • Designation of Transfer Date • July 21, 2011 • Status of Rules • Proposed rules will transfer to the bureau • Rules not yet effective will become rules of the bureau • Mortgage reform rules must be issued in final form within 18 months after transfer date, to be effective within 12 months after that

  11. General Powers of the Bureau • Rulemaking Authority • General authority • Standards • FSOC Review of Bureau Regulations • Power • Process

  12. General Powers of the Bureau • Non-Depository Institutions • Coordinate with Federal Trade Commission • Large Depository Institutions • Institutions over $10 billion and any of their affiliates • Other Institutions • Exclusions • Restriction on Mandatory Pre-Dispute Arbitration

  13. Specific Bureau Authorities • Unfair Deceptive or Abusive Acts or Practices • Terms defined • Disclosures • Standards and Safe Harbor • Mortgage booklet • Combined TIL/RESPA

  14. Sample Combined Form – Page 1

  15. Sample Combined Form – Page 2

  16. Sample Combined Form – Page 3

  17. Sample Combined Form – Page 4

  18. Changes in Preemption: Preservation of State Law • Preemption standards • Codifies Barnett standard • Preemption if state law substantially hinders national bank or thrift’s exercise of its powers • State laws that discriminate against nationally-chartered institutions are preempted • No preemption coverage for subsidiaries • Enforcement by State Attorney General

  19. Regulatory Improvements • Small Business Data Collection • Information gathering • Record of responses • Customer’s right to refuse • No access to data by underwriters • Itemization of information required • Personally identifiable information not included • Data to be submitted to the bureau • Definition of terms

  20. Regulatory Improvements • Use of Consumer Reports • Institutions will have to provide the consumers’ credit score on adverse action notices and risk-based pricing notices based in whole or in part on a consumer report • They will also have to provide the information now given on credit score disclosures—the range of scores, key factors, date of the score and person creating the score

  21. Regulatory Improvements • Reverse Mortgages • Study to be done within one year of transfer date on need for conditions or limitations on reverse mortgages • Regulations to be issued, if found to be necessary • Regulations would target unfair, deceptive or abusive practices

  22. Conforming Amendments • Expedited Funds Availability Amendments • The amount required for next day availability has increased from $100 to $200 • Funds Availability dollar amounts must be adjusted for inflation every five years • Fair Credit Reporting Act Amendments • New model forms must be issued by the bureau for providing a notice regarding negative information about the consumer • Regulations may be issued restricting the inappropriate use of medical information

  23. Conforming Amendments • HMDA Additional Information • Whether payments other than fully amortizing payments may be made • The channel through which the application was made • Unique identifiers for the originator under the SAFE Act • A universal loan identifier, a property parcel number • A credit score • Any other information that the bureau may require • Points and fees payable at origination • The difference between the APR and a benchmark rate • Pre-payment penalty information • The value of real property pledged as collateral • The term of any introductory period before an interest rate change

  24. Conforming Amendments • Omnibus Amendments • Regulations required regarding unfair or deceptive practices regarding mortgage loans, including loan modification and foreclosure rescue services

  25. Conforming Amendments • RESPA Amendments • Requires a single, integrated disclosure for mortgage loan transactions using understandable language to aid consumer understanding • Booklets to help borrowers understand real estate settlement services

  26. Conforming Amendments • Truth in Lending Amendments • Gives authority to prescribe rules to prevent circumvention or evasion of TILA, and to facilitate compliance by motor vehicle dealers • Truth in Lending Inflation • Increases the TILA dollar amount for exempting credit transactions or leases from $25,000 to $50,000 • Provides for future indexing for inflation

  27. How Can Wolters Kluwer Financial Services Assist You? • Order our manual Dodd-Frank Wall Street Reform and Consumer Protection Act: Law, Explanation and Analysis for comprehensive coverage of this historic legislation • http://onlinestore.cch.com/default.asp?ProductID=7342 • Check out and subscribe to ComplianceHeadquarters™ for the timely and accurate compliance information financial institutions need • Compliance Calendar - Highlighting important upcoming regulatory events • Research Library - Links to the basic banking compliance laws and regulations • Compliance News - Accurate and timely information • Compliance101 - Quick introductions to a variety of topics • Plus more from the financial industry experts at Wolters Kluwer Financial Services • Visit us at www.WoltersKluwerFS.com • Contact your Wolters Kluwer Financial Services Inside Sales Representative for more information at 1.800.397.2341

  28. Question & Answer

  29. Implications of Dodd-Frank Act • Part 3: Implications for Document Compliance • December 16, 2010

  30. 4 Webinars, 4 Perspectives • Implications of Dodd-Frank Act • PART 1: • ANTI-STEERING & LOAN OFFICER COMPENSATION • PART 2: • IMPACT TO HEDGING • PART 3: • IMPLICATIONS FOR DOCUMENT COMPLIANCE • December 16 • PART 4: • IMPACT TO YOUR LOS • December 21

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