Truth in Lending Act (Regulation Z); Loan Originator Compensation

Docket ID: CFPB-2012-0037
Agency: Consumer Financial Protection Bureau (CFPB)
The CFPB published for public comment in August 2012 a proposed rule amending Regulation Z (Truth in Lending) to implement amendments to the Truth in Lending Act (TILA) made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). On January 20, 2013 the CFPB issued a final rule which was published in Federal Register on February 15, 2013. The final rule implements requirements and restrictions imposed by the Dodd-Frank Act concerning loan originator compensation; qualifications of, and registration or licensing of loan originators; compliance procedures for depository institutions; mandatory arbitration; and the financing of single-premium credit insurance. The final rule revises or provides additional commentary on Regulation Z's restrictions on loan originator compensation, including application of these restrictions to prohibitions on dual compensation and compensation based on a term of a transaction or a proxy for a term of a transaction, and to recordkeeping requirements. The final rule also establishes tests for when loan originators can be compensated through certain profits-based compensation arrangements. At this time, the CFPB is not prohibiting payments to and receipt of payments by loan originators when a consumer pays upfront points or fees in the mortgage transaction. Instead the CFPB will first study how points and fees function in the market and the impact of this and other mortgage-related rulemakings on consumers' understanding of and choices with respect to points and fees. The final rule is designed primarily to protect consumers by reducing incentives for loan originators to steer consumers into loans with particular terms and by ensuring that loan originators are adequately qualified. The CFPB will issue at a later time proposed regulations on anti-steering provisions that TILA section 129B(c)(3) requires the CFPB to adopt.
RIN: 3170-AA13
Impacts and Effects: None
CFR Citation: 12 CFR 1026
Priority: Other Significant
UA and Regulatory Plan Information open glossary dialog  
Publication Period: Spring 2013
Agenda Stage of Rulemaking: Completed Action
Major Rule: Yes
Legal Authorities: 12 USC 5512, 12 USC 5581, 15 USC 1601 et seq
Government Levels Affected: No
Federalism Implications: No
Unfunded Mandates: No
Requires Regulatory Flexibility Analysis: Business, Organizations
Small Entities Affected: No
International Impacts: No
Included in Regulatory Plan: No
Legal Deadline
ActionDateFR Citation
NPRM09/07/201277 FR 55272
NPRM Comment Period End10/16/2012
Final Rule02/15/201378 FR 11280
Docket Details open glossary dialog  
Related RINs: None
Related Dockets: None
Organization: CFPB
Type: Rulemaking

Primary Documents

View All  (2)
Comment Period Closed
Oct 16, 2012 11:59 PM ET
Proposed Rule
Posted: 09/07/2012
ID: CFPB-2012-0037-0049
Comments Not Accepted
Proposed Rule
Posted: 08/17/2012
ID: CFPB-2012-0037-0001

Supporting Documents

View All  (1)
Comments Not Accepted
Supporting & Related Material
Posted: 08/23/2012
ID: CFPB-2012-0037-0002


View All  (714)

Comments Received*
Regulatory Timeline
Pre Rule
Current Stage
Proposed Rule
Current Stage
Final Rule
Current Stage
Current Stage
Agency Contact
Charles Honig
Office of Regulations
202 435-7700
*This count refers to the total comment/submissions received on this docket, as of 11:59 PM yesterday. Note: Agencies review all submissions, however some agencies may choose to redact, or withhold, certain submissions (or portions thereof) such as those containing private or proprietary information, inappropriate language, or duplicate/near duplicate examples of a mass-mail campaign. This can result in discrepancies between this count and those displayed when conducting searches on the Public Submission document type. For specific information about an agency’s public submission policy, refer to its website or the Federal Register document.