On July 30, 2008, the Board of Governors of the Federal Reserve System (“Board”) published in the Federal Register (pages 44522 – 44614) its final rule (the “final rule”) amending Regulation Z and its Official Staff Interpretations in Supplement I to Regulation Z (“Interpretations”). This memorandum will address only that part of the final rule that amends Sections 226.32(d)(7), 226.34(a)(4), and adds new Section 226.35, which relate to HOEPA loans and higher-priced mortgage loans. These amendments become effective October 1, 2009, except for the property tax and insurance escrow requirement of Section 226.35(b)(3) (see page 16 for an explanation). This is our final memorandum addressing the final rule amendments to Regulation Z. Previously we have issued the following memorandums addressing the final rule changes to Regulation Z: (i) on January 23, 2009, we issued a memorandum discussing new Section 226.36, which provides new protections for all closed-end loans secured by a consumer’s principal dwelling; (ii) on January 16, 2009, we issued a memorandum discussing the final rule amendments to the advertising requirements of Section 226.16 and 226.24; and, (iii) on January 9, 2009, we issued a memorandum discussing the final rule amendments to the early disclosure requirements of Section 226.19(a)(1). All of these memorandums may be viewed on the what’s new? page of our website: http://www.bmandg.com. Text of the Final Rule: The text of the final rule can be printed from the Federal Register website by clicking on: http://edocket.access.gpo.gov/2008/pdf/E8-16500.pdf. The amendments to Sections 226.32(d)(7), 226.34(a)(4), and new Section 226.35 are in the above issue of the Federal Register on pages 44603 – 44604. Their Official Staff Interpretations are in the above issue of the Federal Register on pages 44610 – 44613. Overview of the HOEPA Loan and Higher-Priced Mortgage Loan Amendments: (This overview of the amendments is taken from the Board’s July 14, 2008 press release and the Board’s SUMMARY starting on page 44522 of the above referenced issue of the Federal Register.)
