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GAO-13-411R 1 (2013-03-01)

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        Accountability * Integrity * Reliability
United States Government Accountability Office
Washington, DC 20548

          B-324479


          March 1, 2013

          The Honorable Tim Johnson
          Chairman
          The Honorable Mike Crapo
          Ranking Member
          Committee on Banking, Housing, and Urban Affairs
          United States Senate

          The Honorable Jeb Hensarling
          Chairman
          The Honorable Maxine Waters
          Ranking Member
          Committee on Financial Services
          House of Representatives

          Subject: Bureau of Consumer Financial Protection: Loan Originator Compensation
                  Requirements Under the Truth in Lending Act (Regulation Z)

          Pursuant to section 801 (a)(2)(A) of title 5, United States Code, this is our report on a
          major rule promulgated by the Bureau of Consumer Financial Protection (Bureau),
          entitled Loan Originator Compensation Requirements Under the Truth in Lending
          Act (Regulation Z) (RIN: 3170-AA13). We received the rule on February 15, 2013.
          It was published in the Federal Register as a final rule; official interpretations on
          February 15, 2013. 78 Fed. Reg. 11,280.

          The final rule implements amendments to the Truth in Lending Act (TILA) made by
          the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
          The final rule implements requirements and restrictions imposed by the Dodd-Frank
          Act concerning loan originator compensation; qualifications of, and registration or
          licensing of loan originators; compliance procedures for depository institutions;
          mandatory arbitration; and the financing of single-premium credit insurance. The
          final rule revises or provides additional commentary on Regulation Z's restrictions on
          loan originator compensation, including application of these restrictions to
          prohibitions on dual compensation and compensation based on a term of a
          transaction or a proxy for a term of a transaction, and to recordkeeping
          requirements. The final rule also establishes tests for when loan originators can be
          compensated through certain profits-based compensation arrangements. This final
          rule is designed primarily to protect consumers by reducing incentives for loan


GAO-1 3-411 R

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