Technology Aims to Help Lenders Address New California Rule

ComplianceEase technology has been adapted to help originators keep compliant in the face of California's new high-cost lending law. ComplianceEase's ComplianceAnalyzer tool has been updated to enable lenders, brokers, and regulators to identify, in seconds, whether a loan falls under the new "higher-priced" category. Simultaneously, and on a single report, the system includes tests for the various federal statutes that can also place California lending licenses at risk under the new law. Under the new law, starting July in California there will be a new category of loans called "higher-priced mortgage loans." If a loan meets the attributes and thresholds that place it in the "higher-priced" category, originators face prohibitions regarding making "deceptive" or "misleading" statements about the loan to borrowers. Since it will be possible for civil penalties to be as high as $10,000 and directly assessed against individuals, lenders and brokers will need to know whether each loan they originate will be subject to the new restrictions and may make decisions about whether or not they decide to continue originating the new category of loans. California's restrictions in this area follow a growing trend among states to create a "higher-priced" category that is intended to subject a larger quantity of loans to additional restrictions. So far seven other states have created similar loan categories with increased restrictions.