The catalyst which lit the fuse for the global financial crisis is largely thought of as being the sub-prime mortgage crisis in the United States during 2008. This is attributed to the prior practice in the consumer credit industry of giving loans to borrowers who had little or no capacity to repay the loans they were given which resulted in many banks and finance companies holding huge portfolios of loans which had massive default rates. This eventually degraded the viability of the financial system by devaluing several very large financial institutions to the point of bankruptcy. The collapse of the Lehman Brothers Bank in 2008 signalled the first stage in the near systemic breakdown of the financial system. This crisis led to a number of reforms to the way that banks operate in consumer credit markets and the impact of the changes in the banking industry is still being felt today.
Although the truth in lending legislation was introduced in 1968, it was given a major overhaul just after the global financial crisis. The scale of the reforms is considered by many to constitute a revolutionary change in the way that the law of banking and finance operate in this country and there continue to be a range of regulatory updates which are seeking to clarify the interpretation of the mountain of legislation and litigation which has resulted from the changes to the law of borrowing and lending.
The consumer financial protection bureau is the government organisation responsible for the publication of new rules and interpretative guidance on the Truth in Lending legislation. One of the most recent rules that it has produced is a rule of the regarding the issuing of mortgages. Some of the notable changes include exemptions from the rules for smaller service providers, and rules regarding mortgage eligibility. You can view the details of the changes at the government regulator’s website. We also have compliance guides available for download by clicking through to the relevant pages on our site. You can also use the search function on this site to find additional materials.