02 Jan Federal Regulatory, Michigan Legislative and Ohio Regulatory Update
The Consumer Financial Protection Bureau (“CFPB”) recently published a final rule amending the staff commentary that interprets the requirements of Regulation C (Home Mortgage Disclosure). The Michigan legislature recently amended its mortgage lending laws by passing three Senate Bills, effective December 31, 2012. The Ohio Division of Financial Institutions recently issued a notice addressing the prepayment penalty adjustment for 2013.
77 FR 76839 Regulation C (Home Mortgage Disclosure)
The Home Mortgage Disclosure Act (“HMDA”) requires most lenders located in metropolitan areas to collect data about their housing-related lending activity. Banks, savings associations, and credit unions are exempt from collecting data based on their assets. The CFPB has increased the asset-size exemption threshold from $41 million to $42 million. Therefore, banks, savings associations, and credit unions with assets of $42 million or less as of December 31, 2012 are exempt from collecting HMDA data in 2013.
An institution’s exemption from collecting data in 2013 does not affect its responsibility to report data it was required to collect in 2012.
Michigan Senate Bills 1283, 1284, and 1285
The Commissioner of the Financial Institution Bureau of the Department of Commerce has been renamed as the Commissioner of the Office of Financial and Insurance Regulation of the Department of Licensing and Regulatory Affairs.
The definition of a “mortgage loan” has been amended under the Mortgage Brokers, Lenders, and Servicers Licensing Act, the Consumer Mortgage Protection Act, and under the mortgage lending practices laws to exclude a loan transaction in which the proceeds are not used primarily for a personal, family, or household purpose. Additionally, under the mortgage lending practices laws, a “mortgage loan” does not include construction financing, a purchase of an interest in a pool of mortgage loans, or an extension of the maturity of an existing mortgage loan that does not include an increase in the unpaid principal due.
Ohio Prepayment Penalty Adjustment
Effective January 1, 2013, prepayment penalties must not be imposed on the prepayment or refinancing of a residential mortgage loan less than $85,080 (previously $83,894).