June 19, 2013

Cordray: TILA/RESPA disclosures in review

June 20, 2013 – The CFPB has told lawmakers it is still reviewing comments received on its one last pending rulemaking on mortgage lending – the combined disclosures – in an effort to ensure meaningful consumer disclosure while avoiding unnecessary delays in loan closings.

CFPB Director Richard Cordray wrote the lawmakers after receiving a joint letter from lawmakers seeking answers on the rule's potential impact on loan closings.

The bureau has completed all the mortgage reform regulations required of it except one: the rule that combines disclosures required under the Truth in Lending Act and Real Estate Settlement Procedures Act on residential mortgage loans. In writing its rule, the bureau sought to reconcile differences between the two statutes, including the timing for the delivery of disclosures.

The CFPB proposal would require that consumers receive the final disclosure within three days before closings, and another three-day waiting period would be added if loan terms or costs change.

NAFCU and other financial industry trades raised concerns about this requirement because it could easily cause repeated, lengthy delays in loan closings. The groups urged lawmakers – 62 Republicans and 20 Democrats – to weigh in with the CFPB.

"The Bureau understands your concern about delayed closings," Cordray said in a response to lawmakers. Noting the numerous comments received on this aspect of the proposal, he said, "The Bureau is reviewing these comments carefully to determine the most appropriate way to provide meaningful consumer disclosures while, at the same time, avoid unnecessary delays in closings."

A final rule is expected this September.