OCC Issues Residential Mortgage Lending Guidelines

Originally published April/May 2005

The Office of the Comptroller of the Currency ("OCC") recently issued Guidelines Establishing Standards for Residential Mortgage Lending Practices ("Guidelines"). 70 Fed. Reg. 6329 (Feb. 7, 2005). The Guidelines apply to the residential mortgage lending activities of national banks, federal branches and agencies of foreign banks, and operating subsidiaries of those entities (except for brokers, dealers, insurance providers, investment companies, and investment advisers which are functionally regulated) and incorporate certain key provisions of the OCC’s Advisory Letters 2003-2 and 2003-3 (Feb. 21, 2003). The Guidelines were effective April 8, 2005.

If a bank fails to meet the standards prescribed by the Guidelines, the OCC may require the bank to submit a compliance plan. Failure to submit a compliance plan or to materially comply with a plan approved by the OCC could result in the bank being subject to appropriate enforcement action to correct