Skip to main content

Search

Mortgage Lending: J.2.1 Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires that state housing creditors opting to avoid state law follow regulations issued by the Consumer Financial Protection Bureau (CFPB), for mortgage loans made on or after July 21, 2011. Reprinted below is the CFPB’s interim final rule (Regulation D) and its official commentary, both effective July 22, 2011. 12 C.F.R. pt. 1004. See 76 Fed. Reg. 44,226 (July 22, 2011).

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter X—Bureau of Consumer Financial Protection

Part 1004—Alternative Mortgage Transaction Parity (Regulation D)

Sec.

1004.1 Authority, purpose, and scope.

1004.2 Definitions.

1004.3 Preemption of State law.

1004.4 Requirements for alternative mortgage transactions.

AUTHORITY: 12 U.S.C. §§ 3802, 3803; 15 U.S.C. §§ 1604, 1639b; Pub. L. No. 111-203, 124 Stat. 1376 (2010).

Mortgage Lending: § 1004.1 Authority, purpose, and scope.

(a) Authority. This regulation, known as Regulation D, is issued by the Bureau of Consumer Financial Protection to implement the Alternative Mortgage Transaction Parity Act, 12 U.S.C. 3801 et seq., as amended by title X, Section 1083 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 124 Stat. 1376). Section 1004.4 is issued pursuant to the Alternative Mortgage Transaction Parity Act (as amended) and the Truth in Lending Act, 15 U.S.C. 1601 et seq.

Mortgage Lending: § 1004.2 Definitions.

For purposes of this part:

Alternative mortgage transaction means a loan, credit sale, or account:

(1) That is secured by an interest in a residential structure that contains one to four units, whether or not that structure is attached to real property, including an individual condominium unit, cooperative unit, mobile home, or trailer, if it is used as a residence;

(2) That is made primarily for personal, family, or household purposes; and

Mortgage Lending: § 1004.3 Preemption of State law.

Pursuant to 12 U.S.C. 3803, a State-chartered or -licensed housing creditor may make, purchase, and enforce alternative mortgage transactions in accordance with § 1004.4(a) through (c) of this part (as applicable), notwithstanding any provision of State law that restricts the ability of the housing creditor to adjust or renegotiate an interest rate or finance charge with respect to the transaction or to change the amount of interest or finance charges included in a regular periodic payment as a result of such an adjustment or renegotiation.

Mortgage Lending: § 1004.4 Requirements for alternative mortgage transactions.

[Editor’s Note: According to 76 Fed. Reg. 44,226 (July 22, 2011), section 1004.4 is effective as follows: “Mandatory compliance date: Compliance with § 1004.4 of this interim final rule is optional until July 22, 2012 for federal housing creditors and for state housing creditors that are not relying on preemption of state law under § 1004.3. On July 22, 2012, compliance with § 1004.4 is mandatory for all creditors, except as provided in § 1004.4(d).”]

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

* * *

Chapter X—Bureau of Consumer Financial Protection

* * *

Part 1004—Alternative Mortgage Transaction Parity (Regulation D)

* * *

Appendix A to Part 1004—Official Commentary on Regulation D

AUTHORITY: 12 U.S.C. §§ 3802, 3803; 15 U.S.C. §§ 1604, 1639b; Pub. L. No. 111-203, 124 Stat. 1376 (2010).

Mortgage Lending: § 1004.4 Requirements for Alternative Mortgage Transactions

4(a) Mortgages With Adjustable or Renegotiable Rates or Finance Charges and Home Equity Lines of Credit

1. Index values. A creditor may use any measure of index values that meets the requirements in § 1004.4(a)(2)(i). For example, the index may be either single values as of a specific date or an average of values calculated over a specified period.

Mortgage Lending: Introduction and Listing of Provisions

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Pub. L. No. 111-203, 124 Stat. 1376 (2010), significantly altered the preemptive effect of the regulation of national banks by the Office of the Comptroller of the Currency. Those Dodd-Frank Act provisions are set out in Appendix E.2, supra.

Mortgage Lending: 12 U.S.C. § 1465. State law preemption standards for Federal savings associations clarified

(a) In general

Any determination by a court or by the Director or any successor officer or agency regarding the relation of State law to a provision of this chapter or any regulation or order prescribed under this chapter shall be made in accordance with the laws and legal standards applicable to national banks regarding the preemption of State law.

(b) Principles of conflict preemption applicable

Mortgage Lending: Introduction

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transfers responsibility for regulating federal savings associations from the Office of Thrift Supervision (OTS) to the Office of the Comptroller of the Currency (OCC). The OTS was absorbed by the OCC. The OCC has issued a regulation, reprinted below, stating that federal savings associations are subject to the same OCC regulations as applicable to national banks regarding the preemption of state law.

Mortgage Lending: Listing of Provisions

Title 12. Banks and Banking

Chapter I. Comptroller of the Currency, Department of the Treasury

Part 34. Real Estate Lending and Appraisals

Subpart A. General

* * *

Sec.

34.6 Applicability of state law to Federal savings associations and subsidiaries.

Mortgage Lending: 12 C.F.R. § 34.6 Applicability of state law to Federal savings associations and subsidiaries.

In accordance with section 1046 of the Dodd–Frank Wall Street Reform and Consumer Protection Act [12 U.S.C. § 25b], Federal savings associations and their subsidiaries shall be subject to the same laws and legal standards, including regulations of the OCC, as are applicable to national banks and their subsidiaries, regarding the preemption of state law.

[76 Fed. Reg. 43,569 (July 21, 2011).].

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter I—Comptroller of the Currency, Department of the Treasury

Part 157—Deposits

* * *

Sec.

157.11 To what extent does Federal law preempt deposit-related state laws?

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter I—Comptroller of the Currency, Department of the Treasury

Part 160—Lending and Investment

Sec.

160.1 General.

160.2 Applicability of law.

160.3 Definitions.

* * *

160.33 Late charges.

160.34 Prepayments.

160.35 Adjustments to home loans.

* * *

Mortgage Lending: § 160.2 Applicability of law.

State law applies to the lending activities of Federal savings associations and their subsidiaries to the same extent and in the same manner that those laws apply to national banks and their subsidiaries.

Mortgage Lending: § 160.33 Late charges.

A Federal savings association may include in a home loan contract a provision authorizing the imposition of a late charge with respect to the payment of any delinquent periodic payment.

Mortgage Lending: § 160.34 Prepayments.

Any prepayment on a real estate loan must be applied directly to reduce the principal balance on the loan unless the loan contract or the borrower specifies otherwise. Subject to the terms of the loan contract, a Federal savings association may impose a fee for any prepayment of a loan.