Truth in Lending Act

Fed Proposes Fee Restrictions for Brokers 

The Federal Reserve Board, in response to consumer testing results, proposed significant changes to Regulation Z — Truth in Lending Act (TILA) — in an effort to improve disclosures and prevent “unfair practices” in mortgage broker compensation. The Fed’s proposal would prohibit payments to a mortgage broker or loan officer that are based on the interest rate or other terms, and would prohibit a mortgage broker or loan officer from “steering” consumers into transactions that are “not in their interest” in order to increase the compensation paid to brokers and officers.