This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

8767 

Vol. 80, No. 33 

Thursday, February 19, 2015 

1 78 FR 79730 (Dec. 31, 2013). 

2 79 FR 64336 (Oct. 29, 2014). 

3 78 FR 11280 (Feb. 15, 2013). 

4 12 U.S.C. 2603(a). 

5 15 U.S.C. 1604(b). The amendments to RESPA 

and TILA mandating a ‘‘single, integrated 

disclosure’’ are among numerous conforming 

amendments to existing Federal laws found in 

subtitle H of the Consumer Financial Protection Act 

of 2010. Subtitle C of the Consumer Financial 

Protection Act, ‘‘Specific Bureau Authorities,’’ 

codified at 12 U.S.C. chapter 53, subchapter V, part 

C, contains a similar provision. Specifically, section 

1032(f) of the Dodd-Frank Act provides that, by July 

21, 2012, the Bureau ‘‘shall propose for public 

comment rules and model disclosures that combine 

the disclosures required under [TILA] and sections 

4 and 5 of [RESPA] into a single, integrated 

disclosure for mortgage loan transactions covered 

by those laws, unless the Bureau determines that 

any proposal issued by the [Board] and [HUD] 

carries out the same purpose.’’ 12 U.S.C. 5532(f). 

The Bureau issued the 2012 TILA–RESPA Proposal 

pursuant to that mandate and the parallel mandates 

established by the conforming amendments to 

RESPA and TILA, discussed above. 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Parts 1024 and 1026 

[Docket No. CFPB–2014–0028] 

RIN 3170–AA48 

Amendments to the 2013 Integrated 

Mortgage Disclosures Rule Under the 

Real Estate Settlement Procedures Act 

(Regulation X) and the Truth In 

Lending Act (Regulation Z) and the 

2013 Loan Originator Rule Under the 

Truth in Lending Act (Regulation Z) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; Official 

Interpretations. 

SUMMARY: This final rule modifies the 

2013 TILA–RESPA Final Rule. This rule 

extends the timing requirement for 

revised disclosures when consumers 

lock a rate or extend a rate lock after the 

Loan Estimate is provided and permits 

certain language related to construction 

loans for transactions involving new 

construction on the Loan Estimate. This 

rule also amends the 2013 Loan 

Originator Final Rule to provide for 

placement of the Nationwide Mortgage 

Licensing System and Registry ID 

(NMLSR ID) on the integrated 

disclosures. Additionally, the Bureau is 

making non-substantive corrections, 

including citation and cross-reference 

updates and wording changes for 

clarification purposes, to various 

provisions of Regulations X and Z as 

amended or adopted by the 2013 TILA– 

RESPA Final Rule. 

DATES: The rule is effective August 1, 

2015. The final rule applies to 

transactions for which the creditor or 

mortgage broker receives an application 

on or after August 1, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Jaydee DiGiovanni, Policy and 

Procedure Analyst; Richard Arculin and 

David Friend, Counsels; Office of 

Regulations at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Summary of Final Rule 

In November 2013, pursuant to 

sections 1098 and 1100A of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), the 

Bureau issued the Integrated Mortgage 

Disclosures under the Real Estate 

Settlement Procedures Act (Regulation 

X) and the Truth in Lending Act 

(Regulation Z) (2013 TILA–RESPA Final 

Rule),1 combining certain disclosures 

that consumers receive in connection 

with applying for and closing on a 

mortgage loan. 

On October 10, 2014, the Bureau 

proposed several amendments to 

Regulation Z provisions adopted by the 

2013 TILA–RESPA Final Rule 2 (the 

proposal): 

• To extend the timing requirement 

for creditors to provide a revised Loan 

Estimate to consumers when consumers 

lock a rate or extend a rate lock after the 

Loan Estimate is provided. The 2013 

TILA–RESPA Final Rule requires 

creditors to provide a revised Loan 

Estimate with the revised interest rate, 

the points disclosed pursuant to 

§ 1026.37(f)(1), lender credits, and any 

other interest rate dependent charges 

and terms on the date the interest rate 

is locked. The Bureau proposed to 

extend the timing requirement to the 

next business day after the rate is 

locked. 

• To provide for the placement on the 

Loan Estimate form of language relating 

to construction loans in transactions 

involving new construction that is 

required in order for creditors to 

redisclose estimated charges. 

• To make non-substantive 

corrections, including minor wording 

changes, corrected or updated citations 

and cross-references, in the regulation 

and commentary adopted by the 2013 

TILA–RESPA Final Rule. 

• The Bureau also proposed to amend 

the 2013 Loan Originator Final Rule 3 to 

provide for placement of the NMLSR ID 

on the integrated disclosures. 

With respect to the proposal to allow 

creditors to redisclose the Loan Estimate 

one business day after the interest rate 

is locked, the Bureau is extending the 

timing requirement to three business 

days after the rate is locked. With 

respect to all other aspects of the 

proposal, the Bureau is adopting the 

amendments as proposed. The Bureau 

also is adopting additional, nonsubstantive corrections identified since 

the proposal was issued. 

II. Background 

A. The Integrated Disclosures 

Rulemaking 

In July 2010, the Dodd-Frank Act was 

enacted. The Dodd-Frank Act 

transferred rulemaking authority under 

both TILA and RESPA to the Bureau. In 

addition, Dodd-Frank Act sections 

1032(f), 1098, and 1100A mandated that 

the Bureau establish a single disclosure 

scheme for use by lenders or creditors 

in complying with the disclosure 

requirements of both RESPA and TILA. 

Section 1098(2) of the Dodd-Frank Act 

amended RESPA section 4(a) to require 

that the Bureau publish a single, 

integrated disclosure for mortgage loan 

transactions, including ‘‘the disclosure 

requirements of this section and section 

5, in conjunction with the disclosure 

requirements of [TILA]. . . .’’ 4

Similarly, section 1100A(5) of the DoddFrank Act amended TILA section 105(b) 

to require that the Bureau publish a 

single, integrated disclosure for 

mortgage loan transactions, including 

‘‘the disclosure requirements of this title 

in conjunction with the disclosure 

requirements of [RESPA]. . . .’’ 5 The 

Dodd-Frank Act required the Bureau to 

issue for public comment rules and 

model disclosures that integrated the 


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8768 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

6 12 U.S.C. 5532(f). 

7See Press Release, Consumer Financial 

Protection Bureau, CFPB proposes ‘‘Know Before 

You Owe’’ Mortgage Forms (July 9, 2012), available 

at http://www.consumerfinance.gov/pressreleases/

consumer-financial-protection-bureau-proposesknow-before-you-owe-mortgage-forms/; CFPB 

Mortgage Disclosure Team, CFPB Blog, Know Before 

You Owe: Introducing our proposed mortgage 

disclosure forms (July 9, 2012), available at http:// 

www.consumerfinance.gov/blog/know-before-youowe-introducing-our-proposed-mortgage-disclosureforms/. 

8 78 FR 79730 (Dec. 31, 2013). 

9 Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, 124 Stat. 1376, 

section 1061(b)(7) (2010); 12 U.S.C. 5581(b)(7). 

10 12 U.S.C. 5581(a)(1). 

11 Dodd-Frank Act section 1002(14), 12 U.S.C. 

5481(14) (defining ‘‘Federal consumer financial 

law’’ to include the ‘‘enumerated consumer laws’’ 

and the provisions of title X of the Dodd-Frank Act); 

Dodd-Frank Act section 1002(12), 12 U.S.C. 

5481(12) (defining ‘‘enumerated consumer laws’’ to 

include TILA and RESPA); Dodd-Frank Act section 

1400(b), 15 U.S.C. 1601 note (defining ‘‘enumerated 

consumer laws’’ to include certain subtitles and 

provisions of Title XIV). 

12 12 U.S.C. 5532(f). 

13Section 1100A of the Dodd-Frank Act amended 

TILA section 105(b) to provide that the ‘‘Bureau 

shall publish a single, integrated disclosure for 

mortgage loan transactions (including real estate 

settlement cost statements) which includes the 

disclosure requirements of this title in conjunction 

with the disclosure requirements of the Real Estate 

Settlement Procedures Act of 1974 that, taken 

together, may apply to a transaction that is subject 

to both or either provisions of law.’’ 15 U.S.C. 

1604(b). Section 1098 of the Dodd-Frank Act 

amended RESPA section 4(a) to require the Bureau 

to publish a ‘‘single, integrated disclosure for 

mortgage loan transactions (including real estate 

settlement cost statements) which includes the 

disclosure requirements of this section and section 

5, in conjunction with the disclosure requirements 

of the Truth in Lending Act that, taken together, 

may apply to a transaction that is subject to both 

or either provisions of law.’’ 12 U.S.C. 2603(a). 

14See Dodd-Frank Act sections 1098, 1100A. 

15TILA section 128(b)(2)(A); 15 U.S.C. 

1638(b)(2)(A). This requirement applies to 

extensions of credit that are both secured by a 

dwelling and subject to RESPA. 

16TILA section 128(b)(2)(D); 15 U.S.C. 

1638(b)(2)(D). 

17TILA section 128(b)(2)(B)(ii); 15 U.S.C. 

1638(b)(2)(B)(ii). 

TILA and RESPA disclosures by July 21, 

2012.6

The Bureau issued proposed 

integrated disclosure forms and rules for 

public comment on July 9, 2012 (the 

2012 TILA–RESPA Proposal).7 On 

December 31, 2013, more than 17 years 

after Congress first directed the Federal 

Reserve Board and the Department of 

Housing and Urban Development (HUD) 

to integrate the disclosures under TILA 

and RESPA, the Bureau published the 

2013 TILA–RESPA Final Rule.8

B. Implementation Support 

In early 2014, the Bureau initiated 

efforts to support industry 

implementation of the 2013 TILA– 

RESPA Final Rule. These on-going 

efforts include: (1) The publication of a 

plain-language compliance guide and 

guide to forms to help industry 

understand the new rules, including 

updates to the guides, as needed; (2) the 

publication of a readiness guide for 

institutions to evaluate their readiness 

and facilitate compliance with the new 

rules; (3) the publication of a disclosure 

timeline that illustrates the process and 

timing requirements of the new 

disclosure rules; (4) an ongoing series of 

webinars to address common 

interpretive questions; (5) roundtable 

meetings with industry, including 

creditors, settlement service providers, 

and technology vendors, to discuss 

implementation; (6) participation in 

conferences and forums; and (7) close 

collaboration with State and Federal 

regulators on implementation of the 

2013 TILA–RESPA Final Rule, 

including coordination on consistent 

examination procedures. More 

information regarding the Bureau’s 

TILA–RESPA implementation initiative 

can be found on the Bureau’s regulatory 

implementation Web site at 

www.consumerfinance.gov/regulatoryimplementation. 

III. Comments 

The Bureau received 31 comments 

from creditors, trade associations, 

technology vendors, and others in 

response to the October 10, 2014 

proposal to amend the 2013 TILA– 

RESPA Final Rule. Many of the 

comments discussed issues beyond the 

scope of the proposal. The Bureau 

discusses those comments that were 

responsive to the proposal in the 

section-by-section analysis below. This 

final rule does not make any changes 

outside the scope of the proposal, other 

than additional, non-substantive 

corrections identified since the proposal 

was issued. 

IV. Legal Authority 

The Bureau is issuing this final rule 

pursuant to its authority under TILA, 

RESPA, and the Dodd-Frank Act. 

Section 1061 of the Dodd-Frank Act 

transferred to the Bureau the ‘‘consumer 

financial protection functions’’ 

previously vested in certain other 

Federal agencies, including the Board’s 

consumer protection functions relating 

to TILA mortgage disclosures and the 

HUD Secretary’s consumer protection 

functions relating to RESPA.9 The term 

‘‘consumer financial protection 

function’’ is defined to include ‘‘all 

authority to prescribe rules or issue 

orders or guidelines pursuant to any 

Federal consumer financial law, 

including performing appropriate 

functions to promulgate and review 

such rules, orders, and guidelines.’’ 10

Title X of the Dodd-Frank Act, 

including section 1061 of the DoddFrank Act, along with TILA, RESPA, 

and certain subtitles and provisions of 

title XIV of the Dodd-Frank Act, are 

Federal consumer financial laws.11

Accordingly, the Bureau has authority 

to issue regulations pursuant to TILA 

and RESPA, including the disclosure 

requirements added to those statutes by 

title XIV of the Dodd-Frank Act, as well 

as title X of the Dodd-Frank Act. 

A. The Integrated Disclosure Mandate 

Section 1032(f) of the Dodd-Frank Act 

requires that, ‘‘[n]ot later than one year 

after the designated transfer date [of July 

21, 2011], the Bureau shall propose for 

public comment rules and model 

disclosures that combine the disclosures 

required under [TILA] and sections 4 

and 5 of [RESPA], into a single, 

integrated disclosure for mortgage loan 

transactions covered by those laws, 

unless the Bureau determines that any 

proposal issued by the [Board] and 

[HUD] carries out the same purpose.’’ 12

In addition, the Dodd-Frank Act 

amended section 105(b) of TILA and 

section 4(a) of RESPA to require the 

integration of the TILA disclosures and 

the disclosures required by sections 4 

and 5 of RESPA.13 The purpose of the 

integrated disclosure is to facilitate 

compliance with the disclosure 

requirements of TILA and RESPA and to 

help the consumer understand the 

transaction by using readily 

understandable language to simplify the 

technical nature of the disclosures.14

Although Congress imposed this 

integrated disclosure requirement, it did 

not harmonize the underlying statutes. 

In particular, TILA and RESPA establish 

different timing requirements for 

disclosing mortgage credit terms and 

costs to consumers and require that 

those disclosures be provided by 

different parties. TILA generally 

requires that, within three business days 

of receiving the consumer’s application 

and at least seven business days before 

consummation of certain mortgage 

transactions, creditors must provide 

consumers a good faith estimate of the 

costs of credit.15 If the annual 

percentage rate that was initially 

disclosed becomes inaccurate, TILA 

requires creditors to redisclose the 

information at least three business days 

before consummation.16 These 

disclosures must be provided in final 

form at consummation.17 RESPA also 

requires that the creditor or broker 

provide consumers with a good faith 

estimate of settlement charges no later 


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Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 8769 

18RESPA sections 4(b), 5(c); 12 U.S.C. 2603(b), 

2604(c). 

19TILA section 102(a); 15 U.S.C. 1601(a). 

20TILA section 102(a). 

21 15 U.S.C. 1639. TILA section 129 contains 

requirements for certain high-cost mortgages, 

established by the Home Ownership and Equity 

Protection Act (HOEPA), which are commonly 

called HOEPA loans. 

22RESPA section 2(a); 12 U.S.C. 2601(a). 

23RESPA section 2(b); 12 U.S.C. 2601(b). 

24 12 U.S.C. 5511(a). 

than three business days after receiving 

the consumer’s application. However, 

unlike TILA, RESPA requires that, at or 

before settlement, ‘‘the person 

conducting the settlement’’ (which may 

or may not be the creditor) provide the 

consumer with a statement that records 

all charges imposed upon the consumer 

in connection with the settlement.18

The Dodd-Frank Act did not reconcile 

these and other statutory differences. 

Therefore, to meet the Dodd-Frank Act’s 

mandate to integrate the disclosures 

required by TILA and RESPA, the 

Bureau was required to do so. DoddFrank Act section 1032(f), TILA section 

105(b), and RESPA section 4(a) provide 

the Bureau with authority to issue 

regulations that reconcile certain 

provisions of TILA and RESPA to carry 

out Congress’ mandate to integrate the 

statutory disclosure requirements. 

B. Other Rulemaking and Exception 

Authorities 

This rule also relies on the 

rulemaking and exception authorities 

specifically granted to the Bureau by 

TILA, RESPA, and the Dodd-Frank Act, 

including the authorities discussed 

below. 

Truth in Lending Act 

TILA section 105(a). As amended by 

the Dodd-Frank Act, TILA section 

105(a), 15 U.S.C. 1604(a), directs the 

Bureau to prescribe regulations to carry 

out the purposes of TILA and provides 

that such regulations may contain 

additional requirements, classifications, 

differentiations, or other provisions and 

may further provide for such 

adjustments and exceptions for all or 

any class of transactions that the Bureau 

judges are necessary or proper to 

effectuate the purposes of TILA, to 

prevent circumvention or evasion 

thereof, or to facilitate compliance 

therewith. A purpose of TILA is ‘‘to 

assure a meaningful disclosure of credit 

terms so that the consumer will be able 

to compare more readily the various 

credit terms available to him and avoid 

the uninformed use of credit.’’ 19 This 

stated purpose is informed by Congress’ 

finding that ‘‘economic stabilization 

would be enhanced and the competition 

among the various financial institutions 

and other firms engaged in the 

extension of consumer credit would be 

strengthened by the informed use of 

credit[.]’’ 20 Thus, strengthened 

competition among financial 

institutions is a goal of TILA. 

Historically, TILA section 105(a) has 

served as a broad source of authority for 

rules that promote the informed use of 

credit through required disclosures and 

substantive regulation of certain 

practices. Dodd-Frank Act section 

1100A clarified the Bureau’s section 

105(a) authority by amending that 

section to provide express authority to 

prescribe regulations that contain 

‘‘additional requirements’’ that the 

Bureau finds are necessary or proper to 

effectuate the purposes of TILA, to 

prevent circumvention or evasion 

thereof, or to facilitate compliance. This 

amendment clarified the Bureau’s 

authority to prescribe requirements 

beyond those specifically listed in the 

statute that meet the standards outlined 

in TILA section 105(a). The Dodd-Frank 

Act also clarified the Bureau’s 

rulemaking authority over certain highcost mortgages pursuant to section 

105(a). As amended by the Dodd-Frank 

Act, TILA section 105(a) authority to 

make adjustments and exceptions to the 

requirements of TILA applies to all 

transactions subject to TILA, except 

with respect to the provisions of TILA 

section 129 that apply to the high-cost 

mortgages referred to in TILA section 

103(bb), 15 U.S.C. 1602(bb).21

TILA section 129B(e). Dodd-Frank Act 

section 1405(a) amended TILA to add 

new section 129B(e), 15 U.S.C. 

1639B(e). That section authorizes the 

Bureau to ‘‘prohibit or condition terms, 

acts, or practices relating to residential 

mortgage loans that the Bureau finds to 

be abusive, unfair, deceptive, predatory, 

necessary or proper to ensure that 

responsible, affordable mortgage credit 

remains available to consumers in a 

manner consistent with the purposes of 

this section and section 129C [of TILA], 

necessary or proper to effectuate the 

purposes of this section and section 

129C [of TILA], to prevent 

circumvention or evasion thereof, or to 

facilitate compliance with such 

sections, or are not in the interest of the 

borrower.’’ In developing rules under 

TILA section 129B(e), the Bureau has 

considered the broad mandate of section 

129B. 

Real Estate Settlement Procedures Act 

Section 19(a) of RESPA, 12 U.S.C. 

2617(a), authorizes the Bureau to 

prescribe such rules and regulations and 

to make such interpretations and grant 

such reasonable exemptions for classes 

of transactions as may be necessary to 

achieve the purposes of RESPA. In 

enacting RESPA, Congress sought ‘‘to 

insure that consumers . . . are provided 

with greater and more timely 

information on the nature and costs of 

the settlement process and protected 

from unnecessarily high settlement 

charges caused by certain abusive 

practices in some areas of the 

country.’’ 22 RESPA section 19(a) has 

served as a broad source of authority to 

prescribe disclosures and substantive 

requirements to carry out the purposes 

of RESPA. 

In developing rules under RESPA 

section 19(a), the Bureau has considered 

the purposes of RESPA. One purpose of 

RESPA is ‘‘to effect certain changes in 

the settlement process for residential 

real estate that will result in more 

effective advance disclosure to home 

buyers and sellers of settlement 

costs.’’ 23

Dodd-Frank Act 

Dodd-Frank Act section 1021. Section 

1021(a) of the Dodd-Frank Act provides 

that the Bureau shall seek to implement 

and, where applicable, enforce Federal 

consumer financial law consistently for 

the purpose of ensuring that all 

consumers have access to markets for 

consumer financial services and that 

markets for consumer financial products 

and services are fair, transparent, and 

competitive.24 In addition, section 

1021(b) of the Dodd-Frank Act provides 

that the Bureau is authorized to exercise 

its authorities under Federal consumer 

financial law for the purposes of 

ensuring, with respect to consumer 

financial products and services, that, 

among other things: (1) Consumers are 

provided with timely and 

understandable information to make 

responsible decisions about financial 

transactions; (2) consumers are 

protected from unfair, deceptive, or 

abusive acts and practices and from 

discrimination; (3) outdated, 

unnecessary, or unduly burdensome 

regulations are regularly identified and 

addressed in order to reduce 

unwarranted regulatory burdens; (4) 

Federal consumer financial law is 

enforced consistently, without regard to 

the status of a person as a depository 

institution, in order to promote fair 

competition; and (5) markets for 

consumer financial products and 

services operate transparently and 

efficiently to facilitate access and 


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8770 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

25 12 U.S.C. 5511(b). 

26 12 U.S.C. 5512(b)(1). 

27 12 U.S.C. 5512(b)(2). 

28 12 U.S.C. 5532(a). 

29 12 U.S.C. 5532(c). 

30 78 FR 79730, 79741 (Dec. 31, 2013). 

31 15 U.S.C. 1601 note. 

32 77 FR 51116, 51165–51169 (Aug. 23, 2012). 33 78 FR 79730, 79816–79822 (Dec. 31, 2013). 

innovation.25 In developing this 

rulemaking, the Bureau has sought to 

ensure that it is consistent with the 

purposes of Dodd-Frank Act section 

1021(a) and with the objectives of DoddFrank Act section 1021(b), specifically 

including Dodd-Frank Act section 

1021(b)(1) and (3). 

Dodd-Frank Act section 1022(b). 

Section 1022(b)(1) of the Dodd-Frank 

Act authorizes the Bureau to prescribe 

rules ‘‘as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws, and to prevent evasions 

thereof.’’ 26 Section 1022(b)(2) of the 

Dodd-Frank Act prescribes certain 

standards for rulemaking that the 

Bureau must follow in exercising its 

authority under section 1022(b)(1).27 As 

discussed above, TILA and RESPA are 

Federal consumer financial laws. 

Accordingly, in finalizing this rule, the 

Bureau is exercising its authority under 

Dodd-Frank Act section 1022(b) to 

prescribe rules under TILA, RESPA, and 

title X of the Dodd-Frank Act that carry 

out the purposes and objectives and 

prevent evasion of those laws. See part 

VI for a discussion of the Bureau’s 

standards for rulemaking under DoddFrank Act section 1022(b)(2). 

Dodd-Frank Act section 1032. Section 

1032(a) of the Dodd-Frank Act provides 

that the Bureau ‘‘may prescribe rules to 

ensure that the features of any consumer 

financial product or service, both 

initially and over the term of the 

product or service, are fully, accurately, 

and effectively disclosed to consumers 

in a manner that permits consumers to 

understand the costs, benefits, and risks 

associated with the product or service, 

in light of the facts and 

circumstances.’’ 28 The authority 

granted to the Bureau in section 1032(a) 

is broad and empowers the Bureau to 

prescribe rules regarding the disclosure 

of the ‘‘features’’ of consumer financial 

products and services generally. 

Accordingly, the Bureau may prescribe 

rules containing disclosure 

requirements even if other Federal 

consumer financial laws do not 

specifically require disclosure of such 

features. 

Dodd-Frank Act section 1032(c) 

provides that, in prescribing rules 

pursuant to section 1032, the Bureau 

‘‘shall consider available evidence about 

consumer awareness, understanding of, 

and responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services.’’ 29 Accordingly, in 

developing the 2013 TILA–RESPA Final 

Rule and amendments thereto under 

Dodd-Frank Act section 1032(a), the 

Bureau considered available studies, 

reports, and other evidence about 

consumer awareness, understanding of, 

and responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services. Moreover, the 

Bureau has considered the evidence 

developed through its consumer testing 

of the integrated disclosures as well as 

prior testing done by the Board and 

HUD regarding TILA and RESPA 

disclosures. See part III of the 2013 

TILA–RESPA Final Rule for a 

discussion of the Bureau’s consumer 

testing.30

Dodd-Frank Act section 1405(b). 

Section 1405(b) of the Dodd-Frank Act 

provides that, ‘‘[n]otwithstanding any 

other provision of [title XIV of the 

Dodd-Frank Act], in order to improve 

consumer awareness and understanding 

of transactions involving residential 

mortgage loans through the use of 

disclosures, the Bureau may, by rule, 

exempt from or modify disclosure 

requirements, in whole or in part, for 

any class of residential mortgage loans 

if the Bureau determines that such 

exemption or modification is in the 

interest of consumers and in the public 

interest.’’ 31 Section 1401 of the DoddFrank Act, which amends TILA section 

103(cc)(5), 15 U.S.C. 1602(cc)(5), 

generally defines a residential mortgage 

loan as any consumer credit transaction 

that is secured by a mortgage on a 

dwelling or on residential real property 

that includes a dwelling other than an 

open-end credit plan or an extension of 

credit secured by a consumer’s interest 

in a timeshare plan. Notably, the 

authority granted by section 1405(b) 

applies to ‘‘disclosure requirements’’ 

generally and is not limited to a specific 

statute or statutes. Accordingly, DoddFrank Act section 1405(b) is a broad 

source of authority to exempt from or 

modify the disclosure requirements of 

TILA and RESPA. 

In developing rules for residential 

mortgage loans under Dodd-Frank Act 

section 1405(b), the Bureau has 

considered the purposes of improving 

consumer awareness and understanding 

of transactions involving residential 

mortgage loans through the use of 

disclosures and the interests of 

consumers and the public. 

V. Section-by-Section Analysis 

A. General—Non-Substantive 

Corrections 

The Bureau proposed non-substantive 

corrections, including citation and 

cross-reference updates and wording 

changes for clarification purposes, in 

Regulation X and Regulation Z. The 

Bureau received comments that 

supported these proposed changes. The 

Bureau is adopting as proposed the nonsubstantive corrections to regulatory 

text in §§ 1024.5(d), 1026.37(o), and 

1026.38(e); commentary to 

§§ 1026.37(b), (c), and (h) and 

1026.38(a) and (e); and appendix H. The 

Bureau also is making non-substantive 

clarifications to the commentary to 

§ 1026.38(g) for the reasons discussed in 

the section-by-section analysis below, as 

well as other, non-substantive 

corrections and wording clarifications to 

regulatory text in § 1026.38(j) and (t). 

B. Regulation Z 

Section 1026.19—Certain Mortgage and 

Variable-Rate Transactions 

19(e) Mortgage Loans Secured By Real 

Property—Early Disclosures 

19(e)(3) Good Faith Determination For 

Estimates of Closing Costs 

19(e)(3)(iv) Revised Estimates 

19(e)(3)(iv)(D) Interest Rate Dependent 

Charges 

Proposed Rule 

Pursuant to the Bureau’s authority as 

described in the 2012 TILA–RESPA 

Proposal 32 and the 2013 TILA–RESPA 

Final Rule 33, the Bureau proposed to 

amend § 1026.19(e)(3)(iv)(D) to modify 

the timing requirement for creditors to 

provide a revised Loan Estimate to 

consumers when the interest rate is 

locked after the provision of the Loan 

Estimate. Section § 1026.19(e)(3)(iv)(D), 

as adopted by the 2013 TILA–RESPA 

Final Rule, requires creditors to provide 

the revised disclosure with the revised 

interest rate, the points disclosed 

pursuant to § 1026.37(f)(1), lender 

credits, and any other interest rate 

dependent charges and terms on the 

date the interest rate is locked. The 

Bureau proposed to change the timing 

requirement to the next business day 

after the rate is locked. As discussed in 

detail below, this final rule amends 

§ 1026.19(e)(3)(iv)(D) to provide 

creditors with three business days, 

rather than one business day, to provide 

the revised Loan Estimate. This 

amendment harmonizes the timing 

requirement in § 1026.19(e)(3)(iv)(D) 


rljohnson on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 8771 

with other timing requirements for 

redisclosure adopted in the 2013 TILA– 

RESPA Final Rule and is consistent 

with current law and practice pursuant 

to § 1024.7(f)(5), under which creditors 

have three business days from rate lock 

to provide a revised Good Faith 

Estimate. 

As discussed in the proposal, the 

Bureau proposed to allow creditors an 

additional business day to provide the 

revised Loan Estimate because it 

received information suggesting that 

creditors may not control when a rate is 

locked to the same extent the Bureau 

believed when it issued the 2013 TILA– 

RESPA Final Rule. The Bureau also 

learned that operational challenges due 

to the same-day redisclosure 

requirement in § 1026.19(e)(3)(iv)(D) 

could restrict the flexibility many 

creditors currently provide consumers 

to lock their interest rates and could 

result in creditors imposing time 

restrictions on when consumers may 

lock their rates (e.g., ‘‘cut-off’’ times). 

Given the potential consequences of 

losing the ability to reset the applicable 

tolerances for interest rate dependent 

charges pursuant to § 1026.19(e)(3), the 

Bureau believes creditors could respond 

to the same-day timing requirement 

adopted by the 2013 TILA–RESPA Final 

Rule by limiting consumers’ ability to 

lock rates at the time of their choice and 

imposing cut-off times that only allow 

consumers to lock interest rates on 

business days during preset hours. 

Accordingly, the Bureau reconsidered 

the same-day redisclosure requirement 

and proposed to amend 

§ 1026.19(e)(3)(iv)(D) and its 

commentary to adjust this timing 

requirement. 

Currently, some creditors permit the 

consumer, or loan originator working on 

behalf of the consumer, to lock the 

interest rate unilaterally at any point 

during a business day or even after 

normal business hours. The Bureau 

believes this flexibility is beneficial to 

consumers because it allows them to 

lock interest rates on a date and time of 

their choosing, without time restrictions 

imposed by the creditor. The same-day 

redisclosure requirement could reduce 

consumers’ ability to determine when 

their rates are locked, if creditors 

respond by either imposing cut-off times 

after which consumers are unable to 

lock their interest rates until the next 

business day or refusing to lock the rate 

contractually until the business day 

after the consumer requests a rate lock. 

As explained in the proposal, the 

Bureau believes that, if creditors impose 

cut-off times, consumers would be 

limited to certain times of day that they 

or their representatives could lock 

interest rates. This could result in 

consumers, particularly those who are 

in different time zones than their 

creditors, missing the applicable time 

window to lock on a day of their choice 

and having to wait until the next 

business day to do so. Alternatively, the 

Bureau believes some creditors may be 

able to provide a revised Loan Estimate 

on the date that a rate lock agreement is 

formed if those creditors allow 

consumers to request the rate only at a 

time of the creditors’ choosing and then 

later execute or form a binding 

agreement with the consumers. 

However, the Bureau believes this result 

could present other challenges to 

consumers. For example, consumers 

may be confused if they believe they are 

locking an interest rate at a certain time 

but in fact are merely requesting rates 

that are not contractually binding until 

the creditor accepts the request at some 

later time. Accordingly, the Bureau 

stated in the proposal that it believed 

the same-day redisclosure requirement 

warranted reconsideration because it 

could create implementation challenges 

to industry that may result in reduced 

consumer flexibility in locking or 

resetting floating interest rates. 

The Bureau maintained, however, that 

the same-day redisclosure requirement 

could benefit consumers by allowing 

them to have more time to evaluate the 

revised Loan Estimate. The Bureau also 

noted that creditors should be able to 

provide a revised Loan Estimate based 

on interest rate dependent charges more 

quickly in comparison to other types of 

redisclosures because creditors may not 

need to obtain information from other 

parties, such as third-party vendors. 

Accordingly, the Bureau proposed a 

next-business-day timing requirement, 

on the ground that providing for 

redisclosure on the next business day 

after the rate is locked could provide 

consumer benefits without the 

operational challenges to creditors 

presented by a same-day redisclosure 

requirement. 

The Bureau sought comment on 

whether consumers could be harmed if 

creditors were given until the next 

business day to provide a revised Loan 

Estimate or if consumers would benefit 

from the same-day requirement. 

Additionally, the Bureau sought 

comment on whether a single business 

day is sufficient for creditors to deliver 

or place in the mail a revised Loan 

Estimate while preventing any 

unintended consequences, such as 

restricting the timing flexibility of 

consumers to lock the interest rate, and 

whether consumers would be harmed if 

redisclosures were permitted more than 

one business day after the interest rate 

was locked. 

Comments 

The Bureau received comments from 

industry trade associations, creditors, 

technology vendors, and other industry 

representatives addressing these 

proposed changes. All comments 

supported the proposal to relax the 

timing requirement, but most advocated 

for extending it to three business days. 

The Bureau received no comments that 

opposed the proposal or that raised 

concerns about extending the timing 

requirement beyond the next business 

day. 

Most commenters argued that a nextbusiness-day requirement presents 

many of the same operational challenges 

to industry as a same-day redisclosure 

requirement. For example, a credit 

union stated that one business day does 

not allow creditors sufficient time to 

address potential software issues or 

conduct quality control review of a 

revised Loan Estimate. Another industry 

commenter stated that it takes time to 

update fees and verify that the correct 

information is printed on the 

disclosures generated by older loan 

operating systems. A national banking 

trade association noted that consumers 

with ‘‘self-lock’’ capability commonly 

make mistakes in locking rates or 

attempt to lock through an incorrect 

channel, which requires creditors to 

verify the consumer’s intent to lock the 

rate. Consumers also may leave an 

ambiguous voicemail or email that the 

creditor needs to verify is a rate lock 

request. This commenter explained that 

a single business day is not always 

enough time for a creditor both to verify 

the consumer’s intent and also to issue 

a revised disclosure. Consequently, a 

next-business-day deadline could still 

result in creditors imposing cut-off 

times for consumers to lock interest 

rates. 

Additionally, trade associations, 

banks, and an individual industry 

commenter working for a creditor stated 

that smaller institutions in particular 

may have difficulty redisclosing on the 

next business day after the rate lock due 

to staffing level constraints. 

Commenters noted that, in some cases, 

a single individual may be responsible 

for creating the disclosures, and staffing 

levels may also be affected by inclement 

weather, Saturday business hours, and 

employee training. A credit union 

commenter noted that the nextbusiness-day requirement could burden 

small lending operations that do not 

have a full-time employee to prepare 

disclosures on Saturdays and around 

the holidays. Accordingly, these small 


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8772 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

34Transactions covered by this provision are 

described in § 1026.19(e)(3)(iv)(F) and comment 

19(e)(3)(iv)(F)–1. 

creditors may require additional staff to 

meet the next-business-day delivery 

requirement. 

Commenters argued that expanding 

the timing requirement to three business 

days would facilitate compliance for 

industry and consumer understanding 

because it would provide consistent 

timing rules for redisclosures. A bank 

stated that the three-business-day 

timeframe is the standard in operating 

procedures and systems and is also 

well-established among industry 

professionals. Commenters noted that a 

next-business-day requirement for rate 

locks would result in different timing 

requirements for rate-lock-based 

redisclosure as opposed to other events 

that permit redisclosure, such as 

‘‘changed circumstances’’ described in 

§ 1026.19(e)(3)(iv)(A). These other 

triggering events for redisclosure may 

occur around the time of a rate lock. 

Commenters noted that consumer 

confusion could result if a changed 

circumstance occurs on the same date 

that the rate is locked and the creditor 

needs to produce two different revised 

disclosures on two different dates. 

These commenters stated that the 

provision of two revised Loan Estimates 

to a consumer within the same week 

could cause confusion as to which Loan 

Estimate reflects the most recent and 

accurate information. 

Finally, commenters questioned the 

benefit to consumers of receiving a 

revised Loan Estimate for rate-lockrelated changes two business days 

earlier than is required for other 

redisclosure events, such as ‘‘changed 

circumstances’’ described in 

§ 1026.19(e)(3)(iv)(A). Commenters 

argued that allowing creditors two extra 

business days to provide a revised Loan 

Estimate does not pose risks or harms to 

consumers. A national banking trade 

association stated that consumers get 

little benefit from receiving the revised 

Loan Estimate earlier because a 

consumer has most likely completed the 

shopping process by the time the 

consumer requests a rate lock. These 

commenters generally asserted that the 

benefit to consumers, if any, of receiving 

the revised disclosure earlier does not 

outweigh the costs associated with the 

requirement to provide redisclosures by 

the next business day. 

Final Rule 

The Bureau is adopting proposed 

§ 1026.19(e)(3)(iv)(D), modified to 

extend the timing requirement to no 

later than three business days after the 

date the interest rate is locked. The 

Bureau also is making conforming 

modifications to proposed comments 

19(e)(3)(iv)(D)–1 and 19(e)(4)(i)–2, 

which provide illustrations of the 

timing requirement. 

The Bureau considered the comments 

received and determined that extending 

the timing requirement to no later than 

three business days after the interest 

rate is locked will reduce the burden on 

industry and facilitate compliance 

without harming consumers, and also 

may provide benefits to consumers. The 

Bureau believes that creditors would 

experience operational challenges in 

providing redisclosures by the next 

business day that could be alleviated by 

extending the timing requirement for 

redisclosure to three business days. 

Moreover, extending the redisclosure 

deadline to three business days after the 

rate is locked harmonizes the timing 

requirement in § 1026.19(e)(3)(iv)(D) 

with the other timing requirements for 

redisclosure. Harmonizing the 

redisclosure requirements could 

facilitate compliance and compliance 

monitoring and could reduce consumer 

confusion. Furthermore, allowing 

creditors to have three business days 

from the date the rate is locked to issue 

a revised disclosure would enable small 

creditors with limited staffing levels to 

prepare and review revised disclosures 

without the difficulties and challenges 

that may have arisen under the 

proposed rule. 

The Bureau does not believe a risk of 

potential consumer harm arises in 

extending the period for redisclosure to 

three business days. While the Bureau 

expressed, in the preambles to the 2012 

TILA–RESPA Proposal and the 2013 

TILA–RESPA Final Rule, a concern 

about potential rent-seeking behavior 

through rate arbitrage (e.g., delaying the 

rate lock in order to increase the interest 

rate offered to the consumer or 

otherwise increase the spread between 

market interest rates and the rate offered 

the consumer), the Bureau also 

acknowledged that it had seen no 

evidence nor received any data or 

reports suggesting such a practice under 

the existing Regulation X disclosure 

practice, which employs a threebusiness-day deadline. The Bureau has 

not identified any risks to consumers— 

nor were any raised by commenters in 

response to the Bureau’s request for 

comment on potential risks to 

consumers. 

Accordingly, the Bureau is adopting 

§ 1026.19(e)(3)(iv)(D) to state that, no 

later than three business days after the 

date the interest rate is locked, the 

creditor shall provide a revised version 

of the disclosures required under 

§ 1026.19(e)(1)(i) to the consumer with 

the revised interest rate, the points 

disclosed pursuant to § 1026.37(f)(1), 

lender credits, and any other interest 

rate dependent charges and terms. The 

Bureau also is adopting modified 

versions of proposed comments 

19(e)(3)(iv)(D)–1 and 19(e)(4)(i)–2 to 

reflect this change. 

Section 1026.36—Prohibited Acts or 

Practices and Certain Requirements for 

Credit Secured by a Dwelling 

36(g) Name and NMLSR ID on Loan 

Documents 

36(g)(2) 

36(g)(2)(ii) 

The Bureau proposed to amend 

§ 1026.36(g)(2)(ii) to conform to the 

requirements adopted by the 2013 Loan 

Originator Final Rule. Section 

1026.36(g)(2) lists the specific loan 

documents that must contain the loan 

originator’s name and NMLSR ID. When 

the Bureau issued the 2013 Loan 

Originator Final Rule in January 2013, it 

reserved § 1026.36(g)(2)(ii) for 

references to the integrated disclosures 

the Bureau was expecting to adopt in 

the final rule implementing the 2012 

TILA–RESPA Proposal. The disclosures 

referenced are those required by 

§ 1026.19(e) and (f) as adopted by the 

2013 TILA–RESPA Final Rule. 

The Bureau proposed amending 

§ 1026.36(g)(2)(ii) to include the 

disclosures described in § 1026.19(e) 

and (f), as adopted by the 2013 TILA– 

RESPA Final Rule. The Bureau received 

comments from industry and trade 

associations in support of this proposed 

change and none that opposed it or 

suggested further modifications. 

Accordingly, the Bureau is adopting 

§ 1026.36(g)(2)(ii) as proposed. 

Section 1026.37—Content of Disclosure 

for Certain Mortgage Transactions (Loan 

Estimate) 

37(m) Other Considerations 

Proposed Rule 

The Bureau proposed adding 

§ 1026.37(m)(8) to provide for a 

statement notifying the consumer that a 

revised disclosure may be provided for 

a construction loan in a transaction 

involving new construction where the 

creditor reasonably expects settlement 

to occur more than 60 days after the 

provision of the initial Loan Estimate.34

As explained in the proposal, 

§ 1026.19(e)(3)(iv)(F) provides that a 

creditor may issue revised disclosures at 

any time prior to 60 days before 

consummation if the original disclosure 

clearly and conspicuously states that a 

revised disclosure may be provided. 


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Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 8773 

35Specifically, section 1022(b)(2)(A) of the DoddFrank Act calls for the Bureau to consider the 

potential benefits and costs of a regulation to 

consumers and covered persons, including the 

potential reduction of access by consumers to 

consumer financial products or services; the impact 

on depository institutions and credit unions with 

$10 billion or less in total assets as described in 

section 1026 of the Dodd-Frank Act; and the impact 

on consumers in rural areas. 

Except as provided by § 1026.19(f), the 

creditor may not issue a revised 

disclosure if the original disclosure did 

not contain such a statement. 

The Bureau proposed to add new 

§ 1026.37(m)(8), under the master 

heading ‘‘Additional Information About 

This Loan’’ and the heading ‘‘Other 

Considerations,’’ and new comment 

37(m)(8)–1 to state that placement of the 

language in this section of the form 

satisfies the ‘‘clear and conspicuous’’ 

standard set forth in 

§ 1026.19(e)(3)(iv)(F). The Bureau stated 

that it believes the § 1026.19(e)(3)(iv)(F) 

language is appropriately placed in this 

part of the disclosure mandated by 

§ 1026.37, but sought comment on 

whether the language would be more 

appropriately placed elsewhere on the 

form. 

Comments 

The Bureau received comments from 

trade associations, creditors, and a 

technology vendor. All commenters 

supported the proposal. Commenters 

generally stated that including the 

language concerning construction loans 

in transactions that involve a new 

construction on the Loan Estimate 

should facilitate construction lending. 

Most agreed with the proposed content 

and placement of the language. A few 

commenters made minor suggestions for 

additional clarity or suggested 

alternative placement on the form. For 

example, two trade associations 

recommended that the Bureau provide 

additional clarifying language on the 

nature of the disclosure, as well as 

additional clarification regarding 

placement on the form or provision of 

a sample disclosure illustrating this 

language on the form. 

Final Rule 

The Bureau has considered the 

comments and is adopting 

§ 1026.37(m)(8) and comment 37(m)(8)– 

1 as proposed, with minor wording 

changes for clarification. The Bureau 

believes that the proposed language and 

its placement is appropriate and allows 

creditors to preserve their ability to 

redisclose estimates for construction 

loans in transactions that involve a new 

construction, as provided in 

§ 1026.19(e)(3)(iv)(F). With respect to 

the requests for additional clarifying 

language or a sample disclosure 

illustrating the language on the form, 

the Bureau does not believe that 

additional language or a new sample 

disclosure is necessary. The Bureau 

notes that proposed § 1026.37(m)(8) and 

comment 37(m)(8)–1 contain language 

already promulgated under 

§ 1026.19(e)(3)(iv)(F) and would not 

require any additional consumer testing. 

Further, comment 37(m)(8)–1 provides 

that placement of the new construction 

language in this section of the Loan 

Estimate satisfies the clear and 

conspicuous standard set forth in 

§ 1026.19(e)(3)(iv)(F). 

Section 1026.38—Content of Disclosure 

for Certain Mortgage Transactions 

(Closing Disclosure) 

38(g) Closing Cost Details; Other Costs 

38(g)(2) Prepaids 

Section 1026.38(g)(2) requires 

creditors to disclose certain prepaid 

items disclosed on the Loan Estimate 

pursuant to § 1026.37(g)(2), including 

prepaid interest. Neither the regulation 

nor the model Closing Disclosure forms 

in appendix H provide for disclosure of 

the interest rate for prepaid interest. 

Rather, the model forms provide that 

prepaid interest is to be disclosed on the 

Closing Disclosure as a per diem sum 

amount along with a range of dates, 

without disclosing the applicable 

interest rate, prescribed as: ‘‘Prepaid 

Interest (___per day from _____to 

_____).’’ 

One industry commenter noted that 

comment 38(g)(2)–4, which describes 

the interest rate that should be used to 

calculate per diem interest, implies that 

the interest rate must be disclosed 

pursuant to § 1026.38(g)(2). This 

commenter recommended that the 

Bureau clarify that creditors are not 

required to disclose an interest rate for 

purposes of this disclosure. 

The Bureau agrees that the interest 

rate should not be disclosed in the 

prepaid interest disclosure pursuant to 

§ 1026.38(g)(2). Rather, creditors should 

disclose amounts of prepaid interest as 

per diem sum amounts based on the 

interest rate disclosed under 

§ 1026.38(b), which is determined by 

§ 1026.37(b). Accordingly, the Bureau is 

amending comment 38(g)(2)–4 to clarify 

that the comment addresses the interest 

rate that is used to determine amounts 

of prepaid interest, but does not require 

disclosure of the interest rate itself. 

VI. Dodd-Frank Act Section 1022(b)(2) 

A. Overview 

In developing this rule, the Bureau 

has considered potential benefits, costs, 

and impacts.35 The Bureau has 

consulted, or offered to consult with, 

the prudential regulators, the Securities 

and Exchange Commission, HUD, the 

Federal Housing Finance Agency, the 

Federal Trade Commission, the U.S. 

Department of Veterans Affairs, the U.S. 

Department of Agriculture, and the 

Department of the Treasury, including 

regarding consistency with any 

prudential, market, or systemic 

objectives administered by such 

agencies. 

The Bureau is adding or amending 

two main provisions in this rule. First, 

the Bureau is amending 

§ 1026.19(e)(3)(iv)(D) which, as adopted 

by the 2013 TILA–RESPA Final Rule, 

requires creditors to provide a revised 

version of the disclosures required 

under paragraph § 1026.19(e)(1)(i) to the 

consumer with the revised interest rate, 

the points disclosed pursuant to 

§ 1026.37(f)(1), lender credits, and any 

other interest rate dependent charges 

and terms, on the date the rate is locked. 

As discussed in the section-by-section 

analysis above, the Bureau believes that 

this requirement, if unchanged, is likely 

to result in at least some creditors 

imposing cut-off times that only allow 

consumers to lock their interest rates 

only on business days and during preset 

hours due to the costs associated with 

providing the disclosure to the 

consumer on the date when the interest 

rate is locked. The Bureau believes that 

consumers are unlikely to choose 

creditors based on the creditors’ policies 

regarding interest rate locks and, 

moreover, that consumers would be 

unlikely to know whether their creditors 

will allow interest rate locks at flexible 

times until the consumer actually 

attempts to lock the rate. Thus, 

consumers of creditors who will not 

allow locks at flexible times will 

experience inconvenience. Given that 

consumers are unlikely to know of this 

practice until they attempt to lock the 

rate, this practice is unlikely to be 

corrected or influenced by market 

competition. 

Given these concerns, the Bureau 

proposed to relax the same-day timing 

requirement and give creditors until the 

next business day after the rate is locked 

to provide a revised version of the 

disclosures to consumers. As described 

in the section-by-section analysis above, 

in light of the comments received, the 

Bureau is instead finalizing an 

amendment to the provision that affords 

creditors three business days after the 

rate is locked to provide a revised 

version of the disclosures. 

In response to the proposal, several 

commenters noted that the proposed 

next-business-day requirement presents 

many of the same operational challenges 


rljohnson on DSK3VPTVN1PROD with RULES
8774 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

36See 77 FR 51116, 51173 (Aug. 23, 2012). 

to industry as a same-day redisclosure 

requirement. These commenters 

suggested that three business days 

would provide adequate time for 

creditors to issue revised disclosures, 

but that one business day would not. No 

commenters suggested that extending 

the timing requirement beyond the next 

business day would impact consumers 

adversely. 

The Bureau is adopting proposed 

§ 1026.19(e)(3)(iv)(D), modified to 

extend the timing requirement to no 

later than three business days after the 

date the interest rate is locked. The 

change will harmonize the timing 

requirement in § 1026.19(e)(3)(iv)(D) 

with the other timing requirements for 

redisclosure and thus may facilitate 

compliance and compliance monitoring 

and also may reduce consumer 

confusion. Small creditors, in particular, 

may find it easier to comply with a 

three-day redisclosure timing 

requirement. Finally, the Bureau 

believes that the next-business-day 

requirement might not give creditors 

adequate time to confirm the 

consumer’s intentions where the 

consumer’s attempts to lock the rate 

through an incorrect channel, or the 

communication requesting a rate lock 

(e.g., a voicemail or email left with the 

creditor) is ambiguous. The Bureau does 

not possess the data necessary to 

estimate the impact of the change to 

three full business days quantitatively. 

Second, the Bureau is adding a new 

provision that allows for a specific 

statement related to construction loans 

in transactions involving new 

construction to be placed on the Loan 

Estimate. For these loans, the 2013 

TILA–RESPA Final Rule requires that 

creditors include a statement on the 

Loan Estimate in order to preserve their 

ability to redisclose estimates prior to 

settlement. However, this language is 

found only in § 1026.19(e)(3)(iv)(F), 

which governs timing and procedure, 

and no corresponding provision exists 

in the section that governs the content 

of the disclosures. Without this new 

provision, creditors will have lower 

incentives to originate these 

construction loans, especially if they 

believe that the Loan Estimate might 

need to be revised. Consumers either 

will not be able to get a commitment to 

fund construction loans until most of 

the uncertainty about the terms is 

resolved or creditors will price in a 

premium, to account for the creditor’s 

inability to redisclose estimates after the 

initial 60 days. 

The Bureau believes that both 

amendments, extending the time for rate 

lock redisclosure and adding language 

on new construction loans, provide 

options that a financial institution is 

free to undertake or not to undertake, 

and thus present no cost to creditors. 

The Bureau believes that both 

provisions present some benefits to 

creditors. The Bureau believes that the 

first provision could present both 

benefits and costs to consumers, while 

the second provision presents benefits 

to consumers. 

B. Potential Benefits and Costs to 

Consumers and Covered Persons 

Relaxing the Same-day Redisclosure 

Requirement for Interest Rate Locks 

This amendment provides an option 

to creditors: creditors may continue to 

provide revised disclosures on the date 

the rate is locked if they so choose. 

Therefore, some creditors will benefit 

from this amendment by not having to 

redisclose on the date the rate is locked, 

while other creditors may continue to 

redisclose on the date the rate is locked 

if they so choose, and are as well off as 

they would have been without this 

amendment. All creditors will enjoy 

increased flexibility. No creditors will 

face increased costs. 

Under the current rule, the Bureau 

believes that some creditors could 

continue offering flexible time periods 

for interest rate locks, but others, for 

example, might choose to impose cut-off 

times that only permit consumers to 

lock interest rates on business days and 

at times early in the day in order to ease 

their compliance costs. Other creditors 

might change their existing practices 

and allow consumers to request a rate 

lock at any time, but only contractually 

lock the interest rate on the business 

day after the consumer requests a rate 

lock, instead of on the date the rate lock 

is requested. Consumers of these 

creditors could benefit from this 

amendment through the increased 

convenience of being able to lock the 

interest rate at more flexible times. 

Consumers of creditors that would 

continue to allow flexibility in locking 

interest rates might experience a cost 

from the amendment: their revised Loan 

Estimate may not be provided until up 

to three business days later. However, 

some of these creditors may still provide 

a revised Loan Estimate on the date that 

the interest rate is locked, for example, 

because they have already put in place 

the system to provide the redisclosures 

on the date the rate is locked and do not 

want to change their systems. If the 

creditor does not provide the revised 

Loan Estimate until up to three business 

days later, then the potential consumer 

harm is the time difference between 

when the consumer would receive the 

revised disclosures. 

While the Bureau does not possess 

any data, and is not aware of a source 

to obtain data, that would enable it to 

report the quantitative effects of this 

amendment, it believes any harm to 

consumers from the extension of the 

rate-lock-redisclosure timing 

requirement is minor. Under current 

law and practice pursuant to 

§ 1024.7(f)(5), creditors have three 

business days from rate lock to 

redisclose, and the Bureau has not 

received any data or reports of 

consumer harm resulting from a three 

business day turnaround time for 

redisclosure.36

Specific Language on Construction 

Loans’ Loan Estimates 

The Bureau believes that without this 

new provision, creditors that ordinarily 

originate construction loans in 

transactions involving a new 

construction would be forced either to 

originate only those construction loans 

for which the creditor is certain that no 

redisclosure prior to settlement will be 

necessary, or to price in the risk of 

having to cure any amounts charged 

over the estimates initially provided 

more than 60 days before settlement, 

absent some other type of a redisclosure 

triggering event. Creditors that choose 

the second option, including the 

estimated cost of cure in their pricing, 

risk miscalibrating the pricing and 

losing consumers to less risk-averse 

competitors or facing unanticipated 

costs if they are required to cure any 

amounts that the consumer is charged 

for settlement charges that exceed the 

initial estimated amounts. In all events, 

creditors risk losing consumers to other 

options. Accordingly, this new 

provision presents benefits to the 

creditors that decide to originate these 

construction loans and presents no 

costs. 

As noted above, under the current 

rule, a consumer who needs a 

construction loan may only be able to 

obtain a construction loan where the 

creditor has priced in the risk of having 

to cure any amounts charged over the 

estimates initially provided over 60 

days before settlement, which would be 

a cost to consumers. On the other hand, 

without this new provision, the Loan 

Estimate would have provided 

consumers more certainty concerning 

loan terms and settlement costs because 

creditors would be limited in their 

ability to redisclose and change the 

terms or costs of the loan. Where 

creditors misgauged the initial Loan 

Estimate, consumers might be entitled 

to receive a cure. However, the Bureau 


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Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 8775 

believes that these benefits to 

consumers are marginal, given that 

construction loans are inherently 

volatile and subject to events beyond 

the creditor’s control. As a result, the 

Bureau believes that creditors barred 

from redisclosing a Loan Estimate 

provided more than 60 days prior to 

consummation would be less likely to 

originate such loans and that any 

increased certainty, where creditors 

were willing to commit to new 

construction loans well in advance of 

consummation, would come at the price 

of increased costs to consumers. 

The Bureau does not possess any data, 

and is not aware of a source to obtain 

data, that would enable it to report the 

number of transactions affected or to 

quantify the extent of creditor and 

consumer benefits. 

C. Impact on Covered Persons With No 

More Than $10 Billion in Assets 

The amendment regarding interest 

rate locks could have two particular 

effects on covered persons with no more 

than $10 billion in assets. First, covered 

persons with no more than $10 billion 

in assets are more likely to benefit from 

this provision to the extent that 

redisclosure of the Loan Estimate on the 

date the interest rate is locked may 

require software and business processes 

upgrade costs. Larger covered persons 

are more likely to originate a sufficient 

number of transactions to make it worth 

implementing these changes, as 

opposed to choosing to offer interest 

rate locks to consumers only at set times 

during business hours. 

In addition, creditors located in more 

than one time zone might have to offer 

a shorter preset adjustment time to some 

customers (for example, if the location 

of the rate lock operation is in the 

Eastern Time zone), but covered persons 

with no more than $10 billion in assets 

are more likely to be located in a single 

time zone. From this perspective, 

covered persons with no more than $10 

billion in assets are less likely to benefit 

from this amendment. The Bureau does 

not possess data to quantify either of the 

two possible aforementioned effects of 

the provision on covered persons with 

no more than $10 billion in assets. 

The Bureau believes that covered 

persons with no more than $10 billion 

in assets will not be differentially 

affected by the new provision regarding 

construction loans. 

D. Impact on Access to Credit 

The Bureau does not believe that 

there will be an adverse impact on 

access to credit resulting from either of 

the changes adopted by this final rule. 

There may be an expansion of access to 

credit, if the second provision facilitates 

the making of construction loans as the 

Bureau anticipates. 

E. Impact on Rural Areas 

The Bureau believes that rural areas 

might benefit more than urban areas 

from the provision for construction 

loans and the amendment to the existing 

provision for rate lock redisclosure. 

Competition may drive creditors to 

originate construction loans despite the 

possible redisclosure issues and to 

provide interest rate locks throughout 

the day despite the same-day 

redisclosure requirement. Thus, rural 

areas are more likely to benefit from 

these two provisions, to the extent that 

there are fewer creditors operating in 

rural areas than in urban areas and to 

the extent that competition would affect 

these issues. 

VII. Regulatory Flexibility Analysis 

The Regulatory Flexibility Act (the 

RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, requires each 

agency to consider the potential impact 

of its regulations on small entities, 

including small businesses, small 

governmental units, and small nonprofit 

organizations. The RFA defines a ‘‘small 

business’’ as a business that meets the 

size standard developed by the Small 

Business Administration pursuant to the 

Small Business Act. The RFA generally 

requires an agency to conduct an initial 

regulatory flexibility analysis (IRFA) 

and a final regulatory flexibility analysis 

(FRFA) of any rule subject to noticeand-comment rulemaking requirements, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. The Bureau also is subject to 

certain additional procedures under the 

RFA involving the convening of a panel 

to consult with small business 

representatives prior to proposing a rule 

for which an IRFA is required. 

An IRFA is not required for this rule 

because it will not have a significant 

economic impact on any small entities. 

The Bureau does not expect the rule to 

impose costs on covered persons. All 

methods of compliance under current 

law will remain available to small 

entities when these provisions become 

effective. Thus, a small entity that is in 

compliance with current law need not 

take any additional action. 

Accordingly, the undersigned certifies 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

VIII. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501 et seq.), 

Federal agencies are generally required 

to seek the Office of Management and 

Budget (OMB) approval for information 

collection requirements prior to 

implementation. The collections of 

information related to Regulations Z and 

X have been previously reviewed and 

approved by OMB in accordance with 

the PRA and assigned OMB Control 

Numbers 3170–0015 (Regulation Z) and 

3170–0016 (Regulation X). Under the 

PRA, the Bureau may not conduct or 

sponsor and, notwithstanding any other 

provision of law, a person is not 

required to respond to an information 

collection unless the information 

collection displays a valid control 

number assigned by OMB. 

The Bureau has determined that this 

final rule would not impose any new or 

revised information collection 

(recordkeeping, reporting, or disclosure) 

requirements on covered entities or 

members of the public that would 

constitute collections of information 

requiring OMB approval under the PRA. 

List of Subjects 

12 CFR Part 1024 

Condominiums, Consumer protection, 

Housing, Mortgage servicing, Mortgages, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 1026 

Advertising, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Recordkeeping and 

recordkeeping requirements, Reporting, 

Savings associations, Truth in lending. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation X, 12 CFR part 1024, and 

Regulation Z, 12 CFR part 1026, as set 

forth below: 

PART 1024—REAL ESTATE 

SETTLEMENT PROCEDURES ACT 

(REGULATION X) 

■ 1. The authority citation for part 1024 

continues to read as follows: 

Authority: 12 U.S.C. 2603–2605, 2607, 

2609, 2617, 5512, 5532, 5581. 

Subpart A—General Provisions 

■ 2. Section 1024.5 is amended by 

revising paragraph (d) introductory text 

to read as follows: 

§ 1024.5 Coverage of RESPA. 

* * * * * 


rljohnson on DSK3VPTVN1PROD with RULES
8776 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

(d) Partial exemptions for certain 

mortgage loans. Sections 1024.6, 1024.7, 

1024.8, 1024.10, and 1024.33(a) do not 

apply to a federally related mortgage 

loan: 

* * * * * 

PART 1026—TRUTH IN LENDING 

(REGULATION Z) 

■ 3. The authority citation for part 1026 

continues to read as follows: 

Authority: 12 U.S.C. 2601, 2603–2605, 

2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 

U.S.C. 1601 et seq. 

Subpart C—Closed-End Credit 

■ 4. Section 1026.19 is amended by 

revising paragraph (e)(3)(iv)(D) to read 

as follows: 

§ 1026.19 Certain mortgage and variablerate transactions. 

* * * * * 

(e) * * * 

(3) * * * 

(iv) * * * 

(D) Interest rate dependent charges. 

The points or lender credits change 

because the interest rate was not locked 

when the disclosures required under 

paragraph (e)(1)(i) of this section were 

provided. No later than three business 

days after the date the interest rate is 

locked, the creditor shall provide a 

revised version of the disclosures 

required under paragraph (e)(1)(i) of this 

section to the consumer with the revised 

interest rate, the points disclosed 

pursuant to § 1026.37(f)(1), lender 

credits, and any other interest rate 

dependent charges and terms. 

* * * * * 

Subpart E—Special Rules for Certain 

Home Mortgage Transactions 

■ 5. Section 1026.36 is amended by 

adding paragraph (g)(2)(ii) to read as 

follows: 

§ 1026.36 Prohibited acts or practices and 

certain requirements for credit secured by 

a dwelling. 

* * * * * 

(g) * * * 

(2) * * * 

(ii) The disclosures required by 

§ 1026.19 (e) and (f); 

* * * * * 

■ 6. Section 1026.37 is amended by 

adding paragraph (m)(8) and revising 

paragraph (o)(4)(i)(A) to read as follows: 

§ 1026.37 Content of disclosures for 

certain mortgage transactions (Loan 

Estimate). 

* * * * * 

(m) * * * 

(8) Construction loans. In transactions 

involving new construction, where the 

creditor reasonably expects that 

settlement will occur more than 60 days 

after the provision of the loan estimate, 

at the creditor’s option, a clear and 

conspicuous statement that the creditor 

may issue a revised disclosure any time 

prior to 60 days before consummation, 

pursuant to § 1026.19(e)(3)(iv)(F). 

* * * * * 

(o) * * * 

(4) * * * 

(i) * * * 

(A) The dollar amounts required to be 

disclosed by paragraphs (b)(6) and (7), 

(c)(1)(iii), (c)(2)(ii) and (iii), (c)(4)(ii), (f), 

(g), (h), (i), and (l) of this section shall 

be rounded to the nearest whole dollar, 

except that the per diem amount 

required to be disclosed by paragraph 

(g)(2)(iii) of this section and the monthly 

amounts required to be disclosed by 

paragraphs (g)(3)(i) through (iii) and 

(g)(3)(v) of this section shall not be 

rounded. 

* * * * * 

■ 7. Section 1026.38 is amended by 

revising paragraphs (e)(3)(iii)(A), 

(e)(4)(ii), (j)(2)(iv), (k)(2)(v), (k)(2)(vi), 

and (t)(4)(ii) to read as follows: 

§ 1026.38 Content of disclosures for 

certain mortgage transactions (Closing 

Disclosure). 

* * * * * 

(e) * * * 

(3) * * * 

(iii) * * * 

(A) If the amount disclosed under 

paragraph (e)(3)(ii) of this section is 

different than the amount disclosed 

under paragraph (e)(3)(i) of this section 

(unless the difference is due to 

rounding), a statement of that fact, along 

with a statement that the consumer paid 

such amounts prior to consummation of 

the transaction; or 

* * * * * 

(4) * * * 

(ii) Under the subheading ‘‘Final,’’ the 

total amount of payoffs and payments 

made to third parties disclosed pursuant 

to paragraph (t)(5)(vii)(B) of this section, 

to the extent known, disclosed as a 

negative number; 

* * * * * 

(j) * * * 

(2) * * * 

(iv) The amount of any existing loans 

that the consumer is assuming, or any 

loans subject to which the consumer is 

taking title to the property, labeled 

‘‘Existing Loan(s) Assumed or Taken 

Subject to’’; 

* * * * * 

(k) * * * 

(2) * * * 

(v) The amount of any loan secured by 

a first lien on the property that will be 

paid off as part of the real estate closing, 

labeled ‘‘Payoff of First Mortgage Loan’’; 

(vi) The amount of any loan secured 

by a second lien on the property that 

will be paid off as part of the real estate 

closing, labeled ‘‘Payoff of Second 

Mortgage Loan’’; 

* * * * * 

(t) * * * 

(4) * * * 

(ii) Percentages. The percentage 

amounts required to be disclosed under 

paragraphs (b), (f)(1), (n), and (o)(5) of 

this section shall not be rounded and 

shall be disclosed up to two or three 

decimal places. The percentage amount 

required to be disclosed under 

paragraph (o)(4) of this section shall not 

be rounded and shall be disclosed up to 

three decimal places. If the amount is a 

whole number then the amount 

disclosed shall be truncated at the 

decimal point. 

* * * * * 

■ 8. Appendix H to part 1026 is 

amended by revising the Description in 

H–24(G) to read as follows. 

Appendix H to Part 1026—Closed-End 

Forms and Clauses 

* * * * * 

H–24(G) Mortgage Loan Transaction Loan 

Estimate—Modification to Loan Estimate for 

Transaction Not Involving Seller—Model 

Form 

Description: This is a blank model Loan 

Estimate that illustrates the application of the 

content requirements in § 1026.37, with the 

optional alternative tables permitted by 

§ 1026.37(d)(2) and (h)(2) for transactions 

without a seller. This form provides one 

variation of page one, four variations of page 

two, and four variations of page three, 

reflecting the variable content requirements 

in § 1026.37. 

* * * * * 

■ 9. In Supplement I to part 1026: 

■ a. Under Section 1026.19—Certain 

Mortgage and Variable-Rate 

Transactions: 

■ i. Under paragraph 19(e)(3)(iv)(D), 

paragraph 1 is revised. 

■ ii. Under paragraph 19(e)(4)(i), 

paragraph 2 is revised. 

■ b. Under Section 1026.37—Content of 

Disclosures for Certain Mortgage 

Transactions (Loan Estimate): 

■ i. Under paragraph 37(b)(6), paragraph 

1 is revised. 

■ ii. Under paragraph 37(c)(2)(ii), 

paragraph 2 is revised. 

■ ii. Under paragraph 37(c)(2)(iii), 

paragraph 1 is revised. 

■ iii. Under paragraph 37(c)(4)(iv), 

paragraph 2 is revised. 

■ iv. Under paragraph 37(h)(1)(ii), 

paragraph 1 is revised. 


rljohnson on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 8777 

■ v. Under paragraph 37(m), the 

subheading 37(m)(8) Construction loans 

and paragraph 1 are added. 

■ vi. Under paragraph 37(n), paragraph 

2 is revised. 

■ c. Under Section 1026.38—Content of 

Disclosures for Certain Mortgage 

Transactions (Closing Disclosure): 

■ i. Under paragraph 38(a)(3)(vi), 

paragraph 2 is added. 

■ ii. Under paragraph 38(e)(1)(iii)(A), 

paragraph 1 is revised. 

■ iii. Under paragraph 38(e)(2)(iii)(A), 

paragraph 3 is added. 

■ iv. Under paragraph 38(g)(2), 

paragraph 4 is revised. 

The revisions and additions read as 

follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Subpart C—Closed-End Credit 

* * * * * 

Section 1026.19—Certain Mortgage and 

Variable-Rate Transactions 

* * * * * 

19(e)(3)(iv)(D) Interest Rate Dependent 

Charges 

1. Requirements. If the interest rate is 

not locked when the disclosures 

required by § 1026.19(e)(1)(i) are 

provided, a valid reason for revision 

exists when the interest rate is 

subsequently locked. No later than three 

business days after the date the interest 

rate is locked, § 1026.19(e)(3)(iv)(D) 

requires the creditor to provide a 

revised version of the disclosures 

required under § 1026.19(e)(1)(i) 

reflecting the revised interest rate, the 

points disclosed pursuant to 

§ 1026.37(f)(1), lender credits, and any 

other interest rate dependent charges 

and terms. The following examples 

illustrate this requirement: 

i. Assume a creditor sets the interest 

rate by executing a rate lock agreement 

with the consumer. If such an agreement 

exists when the original disclosures 

required under § 1026.19(e)(1)(i) are 

provided, then the actual points and 

lender credits are compared to the 

estimated points disclosed pursuant to 

§ 1026.37(f)(1) and lender credits 

included in the original disclosures 

provided under § 1026.19(e)(1)(i) for the 

purpose of determining good faith 

pursuant to § 1026.19(e)(3)(i). If the 

consumer enters into a rate lock 

agreement with the creditor after the 

disclosures required under 

§ 1026.19(e)(1)(i) were provided, then 

§ 1026.19(e)(3)(iv)(D) requires the 

creditor to provide, no later than three 

business days after the date that the 

consumer and the creditor enter into a 

rate lock agreement, a revised version of 

the disclosures required under 

§ 1026.19(e)(1)(i) reflecting the revised 

interest rate, the points disclosed 

pursuant to § 1026.37(f)(1), lender 

credits, and any other interest rate 

dependent charges and terms. Provided 

that the revised version of the 

disclosures required under 

§ 1026.19(e)(1)(i) reflect any revised 

points disclosed pursuant to 

§ 1026.37(f)(1) and lender credits, the 

actual points and lender credits are 

compared to the revised points and 

lender credits for the purpose of 

determining good faith pursuant to 

§ 1026.19(e)(3)(i). 

* * * * * 

19(e)(4)(i) General Rule 

* * * * * 

2. Relationship to 

§ 1026.19(e)(3)(iv)(D). If the reason for 

the revision is provided under 

§ 1026.19(e)(3)(iv)(D), notwithstanding 

the three-business-day rule set forth in 

§ 1026.19(e)(4)(i), § 1026.19(e)(3)(iv)(D) 

requires the creditor to provide a 

revised version of the disclosures 

required under § 1026.19(e)(1)(i) no later 

than three business days after the date 

the interest rate is locked. See comment 

19(e)(3)(iv)(D)–1. 

* * * * * 

Subpart E—Special Rules for Certain 

Home Mortgage Transactions 

* * * * * 

Section 1026.37—Content of Disclosures 

for Certain Mortgage Transactions (Loan 

Estimate) 

* * * * * 

37(b)(6) Adjustments After 

Consummation 

1. Periods not in whole years. For 

guidance on how to disclose increases 

after consummation that occur after a 

number of months less than 24 but that 

do not equate to a number of whole 

years or within a number of days less 

than a week, see the guidance provided 

in comment 37(a)(10)–3. For increases 

that occur after more than 24 months, 

see the guidance provided in comment 

37(b)(8)–1. 

* * * * * 

Paragraph 37(c)(2)(ii) 

* * * * * 

2. Relationship to principal and 

interest disclosure. The creditor 

discloses mortgage insurance premiums 

pursuant to § 1026.37(c)(2)(ii) on the 

same periodic basis that payments for 

principal and interest are disclosed 

pursuant to § 1026.37(c)(2)(i), even if 

mortgage insurance premiums are 

actually paid on some other periodic 

basis. 

Paragraph 37(c)(2)(iii) 

1. Escrow disclosure. The disclosure 

described in § 1026.37(c)(2)(iii) is 

required only if the creditor will 

establish an escrow account for the 

payment of some or all of the charges 

described in § 1026.37(c)(4)(ii). If no 

escrow account for the payment of some 

or all such charges will be established, 

the creditor discloses the escrow 

amount as ‘‘0.’’ If an escrow account is 

established for the payment of amounts 

described in § 1026.37(c)(4)(ii), but no 

escrow payment is required with a 

particular periodic payment (such as 

with a final balloon payment) or range 

of payments, the escrow payment 

should be disclosed as ‘‘—.’’ 

* * * * * 

Paragraph 37(c)(4)(iv) 

* * * * * 

2. Amounts paid by the creditor using 

escrow account funds. Section 

1026.37(c)(4)(iv) requires the creditor to 

disclose an indication of whether the 

amounts disclosed pursuant to 

§ 1026.37(c)(4)(ii) will be paid by the 

creditor using escrow account funds. If 

the amount disclosed pursuant to 

§ 1026.37(c)(4)(ii) requires the creditor 

to disclose a description of more than 

one amount and only some of those 

amounts will be paid by the creditor 

using escrow account funds, the creditor 

may indicate that only some of those 

amounts will be paid using escrow 

account funds, such as by using the 

word ‘‘some.’’ 

* * * * * 

37(h)(1)(ii) Closing Costs Financed 

1. Calculating amount. The amount of 

closing costs financed disclosed under 

§ 1026.37(h)(1)(ii) is determined by 

subtracting the estimated total amount 

of payments to third parties not 

otherwise disclosed pursuant to 

§ 1026.37(f) and (g) from the total loan 

amount disclosed pursuant to 

§ 1026.37(b)(1). If the result of the 

calculation is a positive number, that 

amount is disclosed as a negative 

number under § 1026.37(h)(1)(ii), but 

only to the extent that it does not exceed 

the total amount of closing costs 

disclosed under § 1026.37(g)(6). If the 

result of the calculation is zero or 

negative, the amount of $0 is disclosed 

under § 1026.37(h)(1)(ii). 

* * * * * 


rljohnson on DSK3VPTVN1PROD with RULES
8778 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Rules and Regulations 

37(m)(8) Construction Loans 

1. Clear and conspicuous statement 

regarding redisclosure for construction 

loans. For construction loans in 

transactions involving new 

construction, where the creditor 

reasonably expects the settlement date 

to be 60 days or more after the provision 

of the disclosures required under 

§ 1026.19(e)(1)(i), providing the 

statement, ‘‘You may receive a revised 

Loan Estimate at any time prior to 60 

days before consummation’’ under the 

master heading ‘‘Additional Information 

About This Loan’’ and the heading 

‘‘Other Considerations’’ pursuant to 

§ 1026.37(m)(8) satisfies the 

requirements set forth in 

§ 1026.19(e)(3)(iv)(F) that the statement 

be made clearly and conspicuously on 

the disclosure. 

37(n) Signature Statement 

* * * * * 

2. Multiple consumers. If there is 

more than one consumer who will be 

obligated in the transaction, the first 

consumer signs as the applicant and 

each additional consumer signs as a coapplicant. If there is not enough space 

under the heading ‘‘Confirm Receipt’’ to 

provide signature lines for every 

consumer in the transaction, the 

creditor may add additional signature 

pages, as needed, at the end of the form 

for the remaining consumers’ signatures. 

However, the creditor is required to 

disclose the heading and statement 

required by § 1026.37(n)(1) on such 

additional pages. 

* * * * * 

Section 1026.38—Content of Disclosures 

for Certain Mortgage Transactions 

(Closing Disclosure) 

* * * * * 

38(a)(3)(vi) Property 

* * * * * 

2. Multiple properties. Where more 

than one property secures the credit 

transaction, § 1026.38(a)(3)(vi) requires 

disclosure of all property addresses. If 

the addresses of all properties securing 

the transaction do not fit in the space 

allocated on the Closing Disclosure, an 

additional page with the addresses of all 

such properties may be appended to the 

end of the form. 

* * * * * 

Paragraph 38(e)(1)(iii)(A) 

1. Statements of increases or 

decreases. Section 1026.38(e)(1)(iii)(A) 

requires a statement of whether the 

amount increased or decreased from the 

estimated amount. The statement, ‘‘This 

amount increased,’’ in which the word 

‘‘increased’’ is in boldface font and is 

replaced with the word ‘‘decreased’’ as 

applicable, complies with this 

requirement. 

* * * * * 

Paragraph 38(e)(2)(iii)(A) 

* * * * * 

3. Statements regarding excess 

amount and any credit to the consumer. 

Section 1026.38(e)(2)(iii)(A) requires a 

statement that an increase in closing 

costs exceeds legal limits by the dollar 

amount of the excess and a statement 

directing the consumer to the disclosure 

of lender credits under § 1026.38(h)(3) if 

a credit is provided under 

§ 1026.19(f)(2)(v). See form H–25(F) in 

appendix H to this part for examples of 

such statements. 

* * * * * 

38(g)(2) Prepaids 

* * * * * 

4. Interest rate for prepaid interest. 

The dollar amounts disclosed pursuant 

to § 1026.38(g)(2) must be based on the 

interest rate disclosed under 

§ 1026.38(b), as required by 

§ 1026.37(b)(2). 

* * * * * 

Dated: January 18, 2015. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2015–01321 Filed 2–18–15; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

15 CFR Part 922 

[Docket No. 120809321–4999–03] 

RIN 0648–BC26 

Gulf of the Farallones and Monterey 

Bay National Marine Sanctuaries 

Regulations on Introduced Species 

AGENCY: Office of National Marine 

Sanctuaries (ONMS), National Oceanic 

and Atmospheric Administration 

(NOAA), Department of Commerce 

(DOC). 

ACTION: Final rule. 

SUMMARY: On March 18, 2013, NOAA 

proposed to prohibit the introduction of 

introduced species into the state waters 

of Gulf of the Farallones and Monterey 

Bay national marine sanctuaries 

(GFNMS and MBNMS, respectively). 

The proposed prohibition included 

exceptions for the catch and release of 

striped bass and for introduced species 

of shellfish as part of commercial 

aquaculture activities in the Tomales 

Bay region of GFNMS (the only 

geographic area within sanctuaries 

offshore of California where aquaculture 

occurs). On March 27, 2014, NOAA 

amended the proposal to allow GFNMS 

and MBNMS to consider authorizing the 

introduction of certain introduced 

species of shellfish, those considered to 

be non-invasive, from commercial 

aquaculture culture projects in all state 

waters of the sanctuaries. NOAA’s final 

action allows MBNMS to authorize state 

of California permits or leases for 

commercial aquaculture projects in state 

waters involving introduced species of 

shellfish that a) the state management 

agencies and NOAA have determined to 

be non-invasive, and b) will not have 

significant adverse impacts to sanctuary 

resources or qualities. For GFNMS, 

NOAA will not adopt authorization 

authority for similar projects in state 

waters at this time and will revert to the 

proposal from March 2013, which 

prohibits introduction of introduced 

species, exempts state permitted 

commercial shellfish aquaculture 

activities within Tomales Bay only, and 

provides an exception for the catch and 

release of striped bass. 

DATES: Effective Date: Pursuant to 

section 304(b) of the National Marine 

Sanctuaries Act (NMSA) (16 U.S.C. 

1434(b)), the revised designation and 

regulations shall take effect and become 

final after the close of a review period 

of forty-five days of continuous session 

of Congress beginning on February 19, 

2015. NOAA will publish an 

announcement of the effective date of 

the final regulations in the Federal 

Register. 

FOR FURTHER INFORMATION CONTACT: 

Dave Lott, Regional Operations 

Coordinator, West Coast Region, Office 

of National Marine Sanctuaries, 99 

Pacific Street, STE 100F, Monterey, CA 

93940. (831) 647–1920. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On November 20, 2008, NOAA issued 

a final rule associated with the Joint 

Management Plan Review (JMPR) of 

GFNMS, MBNMS, and Cordell Bank 

National Marine Sanctuary (73 FR 

70488). Among other things, the rule 

prohibited the introduction of 

introduced species within or into both 

the federal and state waters of GFNMS 

and MBNMS, except for the catch and 

release of striped bass in both 

sanctuaries and from existing 

commercial aquaculture activities 

within the Tomales Bay region of 


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