In the September 7, 2012 issue of the Federal Register (77 FR 55272), the Bureau of Consumer Financial Protection (CFPB) published a proposed rule that would amend §§1026.25 (Record Retention) and 1026.36 (Prohibited Acts or Practices and certain Requirements for Credit Secured by a Dwelling) of Regulation Z that would generally: • Add new three year record retention requirements for loan originator compensation paid by or to mortgage brokers and loan originators, the “zero-zero loan alternative” and good faith determination (discussed below), and the bona fide interest rate reduction (discussed below). • Amend the definitions for “loan originator,” “mortgage broker” and “creditor” and add a definition for “compensation.” • Amend the current loan originator compensation provisions of Regulation Z to add a new additional restriction on the imposition of upfront discount points, origination points, or fees on consumers under certain circumstances. • Add requirements concerning proper qualification and registration or licensing for loan originators.

Complete Memorandum