Compliance Blog

Written by JiJi Bahhur, Regulatory Compliance Counsel

TILA/RESPA Forms Under Review.  Last Wednesday, the CFPB’s Director, Richard Cordray, attended the House Small Business Committee hearing as the sole witness.  The purpose of the hearing was to examine the impact of the CFPB’s mortgage disclosure rules on small businesses, including credit unions.  Due to concerns raised by small entities, including credit unions, the CFPB is inviting comments and seeking input on issues about proposed combined disclosures under the TILA/RESPA proposal.  Cordray's written testimony can be found here. 

Based off of concerns received from small entities, here are some of the issues the CFPB is soliciting comment on:

• The CFPB incorporated extensive commentary in the proposal which provides detailed guidance on how to complete the integrated forms.  The guidance also provides samples of completed forms for a variety of loan transactions.

• TILA and RESPA provide differing timing requirements.  The CFPB proposal allows certain specific changes to be made following the settlement disclosure (i.e., require disclosure three days prior to settlement) and seeks comment on whether more exceptions are appropriate. 

• Some small entities believe that certain statutory disclosures would be difficult to calculate and would not help consumers.  The CFPB seeks comment on whether it should use its authorities to remove the disclosures from the integrated forms.

NAFCU published two Regulatory Alerts on the TILA/RESPA proposal – 12-EA-19 and 12-EA-20 â€“ which are available to members only.  Comments are due back to NAFCU by August 20 for 12-EA-19 (regarding the potential changes to the definition of finance charges) and September 21 for 12-EA-20 which reviews the remaining disclosure changes.  

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1099 Pages to Propose a Three-Page Disclosure?  The CFPB recently blogged on an inquiry as to why the TILA/RESPA proposal is 1099 pages in length when the outcome of it was a three-page mortgage disclosure.  In summary, the CFPB explains:

“We are not proposing 1,099 pages of new regulations. That page count is for the notice of the proposed rule, not the rule. Like notices of proposed rulemaking issued by other agencies (particularly the Federal Reserve Board), our proposal consists of three basic parts: (1) the preamble explaining the proposal; (2) the text of the proposed regulations; and (3) guidance on how to comply with those regulations.

In terms of pages, the new regulations are only a small part. Most of the pages explain what we are doing and why we are doing it. As required by law, we analyze the costs and benefits of the proposal for consumers and industry. We also provide thorough guidance on how to comply including samples of completed forms, which the industry requested during our outreach and Small Business Review Panel process. Because of the variability of mortgage loan and real estate transactions, industry wanted specific guidance for many different potential scenarios. This added to the page count.”

If you’d like to view the CFPB’s blog post in its entirety, go here.  The CFPB also posted two brief summaries of the proposal - one for consumers and one that is more technical in detail.   

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Happy Friday to you all!