The Consumer Financial Protection Bureau’s (CFPB) new mortgage disclosure forms and implementing rules don’t take effect until August, but Richard Cordray, the bureau’s director, said lenders already should be making preparations.
In a speech last week to the National Association of Federal Credit Unions, Cordray said the bureau views its new rules and combined mortgage forms as “beneficial to industry as well as consumers.”
“We are reducing paperwork and making it possible for honest, good businesses — like most credit unions — to compete on fair terms,” Cordray said. “Consumers will not be bamboozled by tricky tactics. They will be able to see and understand loan offers for what they really are.”
Cordray noted that the bureau gave industry participants 21 months to implement the new rules and forms. Half of that preparation period now has passed.
“Lenders should already be working on the new rule and getting ready for next summer,” Cordray said. “Implementation of the new rule will require significant changes to business operations and technology platforms, which may require close collaboration with third-party service providers. While many mortgage institutions are already deep into the process of implementing these changes, we want to make sure that everyone understands the need to be focusing on August 2015 right now.”
The bureau has made many compliance resources available on its TILA-RESPA regulatory implementation webpage, Cordray noted. The CFPB updated a pair of guides intended to help smaller entities implement the new forms and rules. In addition, the bureau has been streamlining interpretive guidance on the new provisions and delivering it through a series of webinars hosted by the Federal Reserve.
[You can find information on the webinars and other information on the TILA-RESPA rule at RESPA News, Dodd Frank Update’s sister publication.]
Cordray said the bureau will publish a readiness guide in the next few months to give industry participants a broad checklist of things to do to prepare — such as updating policies and procedures and providing training for staff. The bureau also is coordinating with other regulators to ensure consistency in examinations of mortgage lenders under the new rules.
“Ultimately, what we all are working for is to make sure that different financial institutions receive consistent supervisory treatment from their respective regulators,” Cordray said. He added that the bureau and other regulators will release common examination guidelines and standards so that institutions will know what to expect in advance of the rulemaking’s effective date.
“We are trying to make our rules more understandable and more user-friendly — setting out what you need to know and what you need to do in order to comply with the rules,” Cordray said. “One goal we share is that everyone will be ready to implement the new disclosure system come August 2015.”
View Cordray’s remarks
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CFPB updates compliance guides for disclosure rule implementation