June 02, 2014

Compliance Monitor eyes mortgage loan estimate disclosure

June 3, 2014 – In the June issue of NAFCU's Compliance Monitor, Director of Regulatory Compliance JiJi Bahhur takes a detailed look at the issue of loan estimate disclosures and other requirements for mortgage lending under the Truth in Lending and Real Estate Settlement Procedure Acts.

"For more than three decades, under TILA/RESPA, lenders have been required to provide two different disclosure forms to consumers applying for a mortgage and two other disclosure forms at or shortly before closing on the loan," Bahhur wrote. "The information on these disclosure forms overlaps, and because there are two statutes – TILA and RESPA – governing the forms, there is inconsistency in information that often confuses consumers."

Bahhur explained the general requirements for the early disclosure, the "trigger" for when the form must be delivered, and the "good faith" requirement for making an effort to obtain the necessary information for the form.

Also in the Monitor, Regulatory Compliance Counsel Ricardo Piñeres summarizes the NCUA Board's proposed changes to the Chartering and Field of Membership Manual and how it would change the process for approving associational groups.

The Monitor also answers questions on minimum-payment warnings in credit card statements, small-servicer exemptions in CFPB's mortgage rules and credit unions' federal contractor status in this month's "Compliance Forum."