By, Elva Coffey-Sears
The industry heaved a sigh of relief when the banking regulators announced they would take a consultative approach to initial examinations for compliance with the new Integrated Disclosure Rules. The agencies indicate that although examiners will use the new interagency examination procedures, they will also consider an institution’s implementation plan, including actions taken to update policies, procedures, processes, training activities and actions taken to address technical problems and other implementation issues. This approach, similar to that taken following implementation of the 2014 Ability-to-Repay/Qualified Mortgage rules, is expected to continue through early 2016.
While institutions evidencing a commitment to achieve compliance with the new rules are protected from regulatory enforcement actions during this grace period, the potential for civil liability under the rule is not impacted. The Homebuyers Assistance Act, introduced in July, is intended to provide a safe harbor against regulatory actions and suits filed for violations until February 1, 2016 for institutions making a good faith effort to comply with the requirements. The bill was passed by the House on October 7 and will go to the Senate next.
Unfortunately, the White House is threatening to veto the bill, indicating that the regulators have already provided a safe harbor and that passage would block consumers from access to important consumer protections. To track status of this bill, visit https://www.govtrack.us/congress/bills/114/hr3192, which shows the current prognosis for passage of this bill is 21%.