CFPB Updates Financial Institution Exam Procedures

The Consumer Financial Protection Bureau (CFPB) has released a set of exam procedures to assist financial institutions and mortgage companies plan for regulatory examinations once the new mortgage rules become effective. The updated procedures, the second set issued by CFPB in the last few weeks, cover the Bureau's origination rules issued through the end of May and mortgage servicing rules issued through July 10. Most of the new rules with which the institutions will have to comply will go into effect in January 2014.

"We are committed to transparency around our examination process," said CFPB Director Richard Cordray. "So we have worked hard to provide industry with advance notice of what we will be expecting. That, in turn, will improve compliance and benefit consumers."

The updates issued on Thursday cover the Ability-to-Repay/Qualified Mortgages, high-cost mortgages, and appraisals for higher-priced mortgage loans, as well as new amendments related to the escrows rule. The updates also cover recent changes to credit card rules.

The CFPB is sharing with industry what it will be looking for in its examinations under the new rules by updating the applicable sections of the exam procedure manuals for the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). These documents are intended for use by CFPB examiners in examining the mortgage companies and other financial institutions subject to the new regulations.

A copy of the RESPA exam procedures released today can be found at:
http://files.consumerfinance.gov/f/201308_cfpb_respa_narrative-exam-procedures.pdf

A copy of the TILA exam procedures released today can be found at:
http://files.consumerfinance.gov/f/201308_cfpb_tila-narrative-exam-procedures.pdf