Loan Originator Compensation Amendment (Regulation Z)

Forms and Documents

Document Name	Status
Supporting Statement LO Compensation final rule 2-7-2013-final version.pdf Supporting Statement A	2013-02-12

IC Document Collections

IC ID	Document Title	Status
205751	One-time burden: Reviewing Regulations, inital compliance costs	New
205254	Information About Findings Against the Individual by Government Jurisdi	Modified
205253	Criminal Background Check	Modified
205252	Credit Check	Modified
205251	Record Retention Requirements	Modified

ICR Details

OMB Control No: 3170-0031	ICR Reference No: 201302-3170-002
Status: Historical Active	Previous ICR Reference No: 201211-3170-004
Agency/Subagency: CFPB	Agency Tracking No: Final Rule
Title: Loan Originator Compensation Amendment (Regulation Z)
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved without change	Conclusion Date: 04/17/2013
	Date Received in OIRA: 02/15/2013
Terms of Clearance:

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	04/30/2016	36 Months From Approved
Responses	34,943	0	0
Time Burden (Hours)	114,353	0	0
Cost Burden (Dollars)	240,054	0	0

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Abstract: The Bureau of Consumer Financial Protection is publishing for public comment 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). The proposal would implement statutory changes made by the Dodd-Frank Act to Regulation Z's current loan originator compensation provisions, including a new additional restriction on the imposition of any up front discount points, origination points, or fees on consumers under certain circumstances. In addition, the proposal implements additional requirements imposed by the Dodd-Frank Act concerning proper qualification and registration or licensing for loan originators. The proposal also implements Dodd-Frank Act restrictions on mandatory arbitration and the financing of certain credit insurance premiums. Finally, the proposal provides additional guidance and clarification under the existing regulation's provisions restricting loan originator compensation practices, including guidance on the application of those provisions to certain profit-sharing plans and the appropriate analysis of payments to loan originators based on factors that are not terms but that may act as proxies for a transaction's terms.

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Authorizing Statute(s): US Code: 15 USC 1601 Name of Law: The Truth in Lending Act (TILA)
  

Citations for New Statutory Requirements: US Code: 15 USC 1601 Name of Law: The Truth in Lending Act (TILA)

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
3170-AA13	Final or interim final rulemaking	78 FR 88888	02/12/2013

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 5

IC Title	Form No.	Form Name
Record Retention Requirements
Credit Check
Criminal Background Check
Information About Findings Against the Individual by Government Jurisdi
One-time burden: Reviewing Regulations, inital compliance costs

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ICR Summary of Burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	34,943	0	0	34,943	0	0
Annual Time Burden (Hours)	114,353	0	0	114,353	0	0
Annual Cost Burden (Dollars)	240,054	0	0	240,054	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Changing Regulations

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: New TILA section 129B includes several new requirements, some of which necessitate collections of information addressed in this Supporting Statement. Section 129B(b)(1)(A) requires loan originators to be qualified and licensed or registered to the extent required by State and Federal law, including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act).1 TILA section 129B(c)(1) prohibits loan originator compensation that varies 1 12 U.S.C. 5101-5116. 2 based on the terms of the loan. TILA section 129B(c)(2) provides that, if a consumer directly pays the loan originator, the loan originator may not also receive compensation from any other party in connection with that transaction, such as a creditor or brokerage firm. In addition, it generally prohibits consumers from being charged discount points, origination points, or fees where a loan originator is being compensated by a person other than the consumer, such as a creditor or brokerage firm. However, it gives the CFPB authority to waive or create exemptions from the prohibition on charging consumers discount points, origination points, or fees where doing so is in the interest of consumers and in the public interest. Through a final rule published in the Federal Register on February 15, 2013, the CFPB is amending Regulation Z to implement the statutory provisions described above and to create certain exemptions from the statutory provisions as permitted under the statute.

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Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Is the Supporting Statement intended to be a Privacy Impact Assessment required by the E-Government Act of 2002? No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? Yes

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? Uncollected

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 02/15/2013

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