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NAFCU President and CEO Fred Becker yesterday praised the Consumer Financial Protection Bureau's efforts to gather stakeholders' input on mortgage disclosure rules but told lawmakers the process and the proposed rules resulting from it need work.

Becker delivered his comments in a letter for the record of today's House Small Business Committee hearing on the CFPB's Know Before You Owe initiative to combine disclosures required under the Truth in Lending Act and Real Estate Settlement Procedures Act. The hearing, with CFPB Director Richard Cordray slated to testify, will focus on the impact of the bureau's proposals on small businesses.

The NAFCU president, in Tuesday's letter, gave the CFPB good marks in carrying out the review process called for under the Small Business Regulatory Enforcement Fairness Act. NAFCU Board Member Jeanne Kucey, president and CEO of JetStream FCU in Miami Lake, Fla., participated in the Small Business Review Panel discussion of the TILA/RESPA project, and Becker said the process, overall, "was a positive one."

However, Becker said the proposed rule consolidating the forms is troublesome. "While the CFPB did listen to the concerns raised by the panel participants, those concerns seem to have gone, in large part, unheeded," he wrote.

Becker noted three changes proposed by the CFPB that raise concerns for credit unions: elimination of a lender's ability at application to request information beyond name, home address, social security number and other basic identifying information; a requirement to deliver settlement disclosures three days before settlement; and stricter rules on tolerances for certain settlement charges. These issues "illustrate a fundamental concern" that NAFCU has regarding this and other mortgage rules the CFPB is promulgating, he said.

The CFPB is trying to ensure consumers receive accurate information at each step in the loan process, Becker said, but its proposals limit the information lenders have to guide their decision-making and give them less time to comply. "The two goals of speed and accuracy cannot always be easily reconciled," he wrote.

NAFCU Regulatory Affairs Counsel Dillon Shea went to the Small Business Administration Tuesday for a meeting with other trades, SBA and CFPB staff on the TILA/RESPA proposal and the SBREFA process. The SBA is considering sending its own comment letter and was seeking input on the rule's impact on small entities.

Shea said NAFCU welcomed the opportunity to provide input to the SBA. "NAFCU is very concerned about the proposed rule's impact on credit unions," he said. "We are hopeful that the SBA, as an advocate for small businesses, shares our concerns."

Today's House Small Business Committee hearing is at 1 p.m.