Bowing to pressure from consumer and industry groups, the Federal Reserve said it would halt further Truth in Lending Act rulemaking on three proposed rules related to residential mortgages.
Consumer groups strongly oppose at least one TILA proposal, saying it would eviscerate borrowers' rights to rescind abusive mortgages, and stop foreclosures.
The Fed is slated to hand over responsibility for general TILA rulemaking to the new Consumer Financial Protection Bureau in July. (The Dodd-Frank bill also directs the new agency to merge the TILA and Real Estate Settlement Procedures Act mortgage disclosures into one document.)
The American Bankers Association and other industry warned that further rulemaking by the Fed would complicate CFPB's efforts and make implementation more burdensome for financial institutions.
The Fed acknowledged these issues in a statement issued late Tuesday. "The Board has determined that proceeding with the 2009 and 2010 [TILA] proposals would not be in the public interest."
