Washington, DC—State financial regulators support efforts by the Consumer Financial Protection Bureau (CFPB, or the Bureau) to integrate mortgage disclosures. The revised disclosures are geared toward addressing the discrepancies between the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), for which lenders, consumers, and regulators have long-pursued reconciliation.
In a joint comment letter by the Conference of State Bank Supervisors (CSBS), the American Association of Residential Mortgage Regulators (AARMR), the American Council of State Savings Supervisors (ACSSS), and the National Association of Consumer Credit Administrators (NACCA), state regulators supported most of the changes the Bureau has proposed as a reasonable method for streamlining definitions, disclosure requirements, and exemptions contained in RESPA and TILA in a way that should generally result in greater industry certainty and consumer clarity.
“The incongruent disclosure requirements, language, and definitions in RESPA and TILA have long been recognized by regulators, lenders, and consumers as problematic aspects of the mortgage origination process,” state regulators wrote in the comment letter. “Developing a solution to streamline the requirements contained in the standards has been the focus of various proposals, studies, congressional hearings, and other public engagement….State regulators, for their part, have long felt the impact of the discrepancies while enforcing these statutes. From this perspective, and considering the long-held view of both the industry and consumers surrounding the need for reform, state regulators are pleased to see a drastic simplification and integration that represents a substantial and needed change.”
However, state regulators urged the CFPB to prudently implement all requirements and to ensure the proposed rule will lead to an improved experience with enhanced comprehension for the consumer and will not restrict access to credit or unnecessarily delay a home loan closing.
“CSBS believes the proposed integrated RESPA and TILA disclosures will do much to provide needed clarity for consumers,” said John W. Ryan, President and CEO of CSBS. “We encourage the CFPB to implement the final rule in such a way that does not unduly burden lenders or prevent credit-worthy borrowers from achieving homeownership.”
The comment letter may be viewed here.