Does anyone know much about this new law effective Jan. 1, 2007? From what I've read in the act, banks are exempt, as long as they do not make high cost loans under HOEPA. Am I correct in assuming this?

Not necessarily. I'm not aware that banks have a blanket exemption, and the points and fees threshold under THLPA is (a) the greater of $2,400 or 5% of total loan amount for loans greater than $30,000, OR (b) 8% of total loan amount if loan is $30,000 or less. So some loans not subject to HOEPA could still be subject to THLPA.

TBA is hosting a seminar on this. I believe the date is Nov 8th.

On Nov 29th at FDIC Outreach meeting, Greg Gonzales (Commissioner TN Dept of Financial Institutions) stated, "at this time he considers banks to be exempt from these requirements."

About a week ago I inquired of the DFI as to whether banks and their subsidiaries are exempt from the law based on the federal preemption clause. I was told by one of their attorneys that they hope to have some guidance issued before year-end.

What about the rate threshold? Does this refer to the percentage points in 226.32(a)(i)coverage?

This is the response I received from the TN Dept of Finance today:

The Department recognizes the exemption language contained in the statute, and we are currently in the process of analyzing the effect of that language. Now that the Act has become effective, we anticipate issues to arise and we will deal with them accordingly. Until such time as we have completed our analysis, we will not be examining depository institutions and their subs for THLPA compliance, but institutions should be aware of the Act. Instead, we will be focusing our efforts and resources on non-depository institutions. Quite frankly, that is where we think the problems are which the statute was designed to address.

We plan to include some FAQs regarding the Act soon on our website (http://state.tn.us/tdfi/) so keep an eye out for it.

Please contact me if you have any questions. Thank you.


Tod K. Trulove
Assistant Commissioner - Bank Division
Tennessee Department of Financial Institutions
511 Union, Fourth Floor, Nashville City Center
Nashville, TN 37219
615-741-5604

Good morning, Mr. Trulove,

I have received information that on Nov. 29th at the FDIC Outreach meeting that Mr. Greg Gonzales stated that at this time he considers banks to be exempt from these requirements.

Can you please confirm this information. Thank you.

We are having a debate over what fees are used to calculate the total fees assessed. Is it ALL fees charged to the borrower (appraisal, attorney, etc) or just certain ones?

Per TBA Legislative Update.....
In response to numerous questions regarding the recently enacted Tennessee Home Loan Protection Act (THLPA), the Department of Financial Institutions issued Department Bulletin FI-07-1. This bulletin outlines the Department’s interpretation of the preemption provision contained in the THLPA. Based on its analysis, the Commissioner has determined that with one possible exception “the THLPA does not apply to national or state banks or trust companies, federal or state savings institutions, federal or state credit unions, or the operating subsidiaries of any of these institutions.” The one possible exception to the preemption clause is the provision which places restrictions on high cost home loan closing locations. The section, TCA 45-20-103(17)(B), provides “a high cost home loan may not be closed in a location other than an office of the lender, at the office of an attorney-at-law licensed to practice law in the State of Tennessee, at the office of a title insurance company or title insurance agency licensed to do business in Tennessee, the office of a settlement or closing agent, or the commercial office of a mortgage broker.” In the Bulletin, the Commissioner also cautions that future judicial interpretations and federal regulator interpretations could impact the Department’s preemption determination.

The TBA would like to thank the Department for its analysis and for acting promptly to issue its determination on the preemption provision. To read Department Bulletin FI-07-1, click on the following link: http://state.tn.us/tdfi/banking/bulletins/FI-07-1.html

After reading the Bulletin, it seems that TDFI says banks are not included but then again we may be. Someone let me know if I'm missing something.

My (limited) understanding: Currently it does not apply to banks, but a some future time it might possibly......

Kinda what I thought. Thanks.