State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you (briefly). Will this proposed regulation affect you or the business in which you are working? If so, how?
In the midst of a weakened global economy cause largely by an avoidable housing crisis, financial regulations inevitably have an impact on us all. Decisions made by agencies such as the Department of Treasury, Federal Reserve, Bureau of Consumer Financial Protection, and the Federal Housing Finance Agency have the power to directly impact our daily lives much more than other agencies which is essentially the reason for my interest in such a regulation.
Also, as a young American looking to own a home in the near future, this regulation has the ability to impact my ability to obtain financing. Beyond merely being a part of the American dream, home buying and the housing market is an essential part of every society’s economy.
Describe the proposal/change.
Nearly 4 decades after being established the Trust in Lending Act (TILA) also commonly referred to as regulation Z has undergone a number of amendments. The most current changes are to make the guidelines in which a consumer secures credit for the purchase of a home stricter. The change comes as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act which was signed into law on July 21, 2010. The act provides strict guidelines to creditors extending credit to consumers of high risk for the purpose of purchasing a home. Two essential changes provided state, prior to approval of such credit, the creditor must ensure that the consumer (1) obtains a written appraisal performed only by a certified or licensed appraiser (2) if the buyer is purchasing a previously mortgaged property at a price lower than the current sale price, an additional appraisal must be conducted and include an analysis of the difference in sale price, changes in market conditions and improvements made to the property.
Several additional modifications to the regulation are proposed to include a change to the understood definition of a high risk mortgage. The intent of the modifications to the regulation appears to be to minimize the chance of another economic catastrophe such as the burst of the “housing bubble” of 2007. Many homes were forced into foreclosure bringing down the value of many homes and causing many to exploit/capitalize on others loses.
Write the public comment that you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment.
Overall, I have no objections to the proposed changes. The changes are necessary in light of the recent state of the housing market and seem to serve a way to prevent consumers from exploiting credit and credit providers from causing another housing bubble. As a suggestion, I would propose that the appraisers be of a completely separate third party entity to ensure impartiality and an ethical implementation of the changes to the regulation. I would also propose that the creditors be prevented from utilizing the same appraiser multiple times. This will also encourage impartiality and prevent creditors from undermining the intent of the changes of the regulation.
Provide the "deadline" by which the public comment must be made. (If the date has already passed, please provide when the deadline was).
Comments must be made on or before October 15, 2012
a. Once you have submitted your comment, what will you be legally entitled to do later in the promulgation process (if you should choose to do so)? (See the textbook's discussion of the Administrative Procedure Act.)
According to the text, the parties that made comments on the rules during their proposal stage can challenge the validity of the rules in court on several different grounds. For example, provided that the regulation is illogical, one could challenge it on grounds of “arbitrary and capricious”.
b. If the proposal passes, identify and explain the five legal theories you could use in an attempt to have (any) administrative regulation declared invalid and overturned in court.
a. Which of these challenges would be the best way to challenge the regulation you selected for this assignment if you wanted to have the regulation overturned and why?
Answer all of these questions for #5 even if you are in favor of your proposed regulation.
The response to question 5 should be a minimum of 2–3 paragraphs long. (15 points)
Copy and paste the above five items into a Microsoft Word document and answer each question fully. Your homework will be about 1 to 2 pages long, single spaced (50 points). (For a copy of a sample homework showing the beginning questions answered, please click here. This will give you some direction on how to complete this assignment – of course, you can't use the regulation listed in this sample.)