Advocacy Applauds Federal Reserve’s Decision on Regulation Z

Release Date: 
Thursday, February 3, 2011 - 5:00am
Release Number: 
Patrick Morris (202) 205-6941

WASHINGTON, D.C. –Chief Counsel for Advocacy Winslow Sargeant today applauded the recent announcement by the Federal Reserve Board that the Board does not expect to finalize three pending rulemakings under Regulation Z, which implements the Truth in Lending Act (TILA), prior to the transfer of rulemaking authority to the Consumer Financial Protection Bureau (CFPB).

Advocacy submitted comments to the Federal Reserve Board on December 23, 2010 encouraging the Board to postpone the rulemaking until the upcoming changes to the Real Estate Settlement Procedures Act (RESPA)-Truth in Lending (TILA) rulemaking are completed. Advocacy asserted that over the past few years, the mortgage industry has been inundated with changes to TILA, RESPA, and other mortgage-related laws. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in July 2010, requires the new CFPB to review RESPA-TILA. Postponing this rulemaking until after the upcoming RESPA-TILA proposals would allow the Board an opportunity to fully analyze the impact of this proposal in light of the changes to the industry.

In addition Advocacy’s comments to the Federal Reserve Board expressed concern with the proposal going forward when little is known about the potential costs, especially given imminent major changes to the industry. Advocacy asserted that burdensome changes could lead to the exit of small entities from the mortgage industry, negatively affecting mortgage availability, competition, and consumers.

“I commend the Federal Reserve for its decision, which will benefit small entities in the mortgage industry,” said Sargeant. “The Office of Advocacy has worked actively with the CFPB, and will continue to do so, as it develops its procedures to ensure that the voice of small business is heard.”

Dodd-Frank established the CFPB to supervise certain activities of financial institutions. The Act requires the CFPB to comply with the Small Business Regulatory Fairness Act (SBREFA) panel process, making it the third agency with this responsibility, joining EPA and OSHA. The SBREFA panel process requires EPA, OSHA and CFPB to conduct special outreach efforts to ensure that small entity views are carefully considered prior to the issuance of a proposed rule.

Advocacy’s December 23rd, 2010 letter can be found at

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers. Regional advocates and an office in Washington, D.C., support the Chief Counsel’s efforts. For more information, visit, or call (202) 205-6533.


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