The Consumer Financial Protection Bureau (CFPB) is publishing the 2013 CFPB Dodd-Frank Mortgage Rules Readiness Guide (the Guide) to help financial institutions come into and maintain compliance with the new mortgage rules outlined in Part I of this guide. The CFPB has designed this guide for use by institutions of all sizes. The Guide summarizes the mortgage rules finalized by the CFPB in January 2013, In January 2013, the Bureau issued eight final rules concerning mortgage markets in the United States pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) Public Law 111-203, 124 Stat. 1376 (2010) (2013 Title XIV Final Rules). The rules amend several existing regulations, including Regulations Z, X, and B. Below is a summary for each rule. The rule headings are hyperlinks that will direct you to the rule-specific CFPB website page. An overview of each rule’s content is also available in the Small Entity Compliance Guides. (See page 21 for links to these guides). Throughout the year, CFPB expects to provide updates to the rules where necessary. Updates will be posted, along with a summary of the changes, on the regulatory implementation CFPB page.

The CFPB amended Regulation Z, which implements the Truth in Lending Act (TILA). Regulation Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer’s ability to repay the loan. The final rule implements Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establish certain protections from liability under this requirement for “Qualified Mortgages.” The final rule also implements Section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated.