The CFPB announced the release of a proposal implementing the Dodd-Frank Act's
amendments to Regulation Z, the Truth in Lending Act's
implementing regulation, related to loan originator compensation.
The proposal places restrictions on upfront points and/or fees,
loan originator compensation, mandatory arbitration, and the
financing of credit insurance premiums.
In particular, under the proposal, a creditor may offer a loan
with or without upfront fees. If a loan is offered with upfront
fees, then it must result in an interest rate reduction, and the
creditor must also make available to the consumer "a
comparable, alternative loan with no upfront discount points,
origination points, or fees that are retained by the creditor [or]
broker"—a "zero-zero alternative."
"Comparable alternative loan" is defined to mean
"that the two loans for which quotes are provided must have
the same terms and conditions, other than the interest rate, any
terms that change solely as a
