Federal Financial Regulation: Statutes, Disclosures, and Timing
Federal framework and disclosure timing
Candidates should map each federal statute to its purpose and trigger. TILA and Regulation Z govern credit disclosures, APR, rescission, and ability-to-repay/qualified mortgage standards. RESPA and Regulation X govern settlement services, escrow, servicing, and anti-kickback rules. TRID integrates the Loan Estimate and Closing Disclosure, with timing tied to receipt, not mailing. ECOA and Regulation B prohibit discrimination and impose adverse-action notice requirements. HMDA requires data collection and reporting. The SAFE Act sets minimum licensing standards for originators. Flood insurance, GLBA privacy, FCRA, and UDAAP round out the compliance map.
Traps: APR is not the note rate; it includes certain finance charges. The Loan Estimate generally must be delivered or placed in mail within three business days after application and received at least seven business days before consummation. The Closing Disclosure generally must be received at least three business days before consummation. A revised Loan Estimate may be permitted only on valid changed circumstances, not to cure sloppy estimates. RESPA Section 8 prohibits fees for referrals, not bona fide compensation for services actually performed. Adverse-action notices have specific timing and content.
Worked example: An applicant submits the six TRID application items on Monday. The creditor must provide the Loan Estimate by Thursday, assuming business days. If the borrower later changes the loan amount, determine whether a valid changed circumstance supports a revised estimate and re-disclosure. Rule of thumb: identify the disclosure, the trigger, the delivery method, then count.