The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173 – the “Act”) http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf is a federal statute that was signed into law by President Obama on July 21, 2010. The purpose of the Act is to prevent unfair, deceptive, or abusive acts or practices under Federal law in connection with any transaction with a consumer for a consumer financial product or service. “Financial services” as defined in the Act include persons acting as an agent, broker, or adviser in real property lease transactions if (i) the lease is on a non-operating basis; (ii) the initial term of the lease is at least 90 days; and (iii) the transaction is intended to result in ownership of the leased property to be transferred to the lessee.
Title XIV of the Act is called the “Mortgage Reform and Anti-Predatory Lending Act” will be administered by a new agency known as the Bureau of Consumer Financial Protection (the “CFPB”) whose “central mission of the Consumer Financial Protection Bureau is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.” However, at this point it is unclear how far the Bureau intends to expand its’ jurisdiction.
The CFPB has been authorized to exercise rule making authority pertaining to the financial laws of the United States. These financial laws include the Homeowner’s Protection Act of 1998, the Home Ownership and Equity Protection Act of 1994, the Real Estate Settlement Procedures Act and the Interstate Land Sales Full Disclosure Act. In addition, pursuant to the Act, the Government Accountability Office is commissioned to study current inter-agency efforts to reduce mortgage foreclosure and rescue scams and loan modification fraud. Undoubtedly, this will result in further regulations and a corresponding increase in potential liability for real estate licensees. The Act already requires Homeowners intending to sell their homes under the HAFA (Home Affordable Foreclosure Alternatives) program to complete a certification form.
Practice Pointer: Attorney Lee Drizin intends to monitor the actions of the Bureau and inform Nevada Real Estate agents of new developments. If anyone encounters issues relating to the Act in their Practice, please don’t hesitate to share your experience with us. You can also visit our website library at www.DrizinLaw.com to view and download the Dodd-Frank Certification Form.