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CUNA comments on CFPB counseling proposal
WASHINGTON (9/10/12)--The Credit Union National Association (CUNA) in a comment letter urged the Consumer Financial Protection Bureau  (CFPB) to expand some portions of pending mortgage regulations that address home purchase counseling.

The CFPB in July released proposed amendments to Regulation Z, Truth in Lending Act (TILA), and Regulation X, Real Estate Settlement Procedures Act (RESPA), that would combine certain home mortgage disclosures.

The mortgage proposal would apply to the majority of consumer mortgages, but would not apply to home equity lines of credit, reverse mortgages, or mortgages that are secured by mobile homes or dwellings that are not attached to land. Creditors that process five or fewer mortgages per year would also not be subject to the rules.

One part of the proposal would require lenders to provide mortgage loan applicants with a list of five home ownership counselors or counseling groups, subject to certain requirements. CUNA in the comment letter said it supports efforts to empower consumers, but suggested the CFPB reduce the number of counselors that a financial institution is required to provide. CUNA also said the CFPB should provide greater flexibility regarding when this list must be provided to borrowers. The CFPB under the proposal would require the list to be delivered no later than three business days after a financial institution receives a borrower's loan application.

Overall, CUNA encouraged the CFPB to consider the burden faced by credit unions as it finalizes these and other mortgage regulations, and suggested the CFPB give financial institutions between one year and 18 months to comply with the pending regulatory changes.

CUNA also is developing separate comment letters on other aspects of the CFPB mortgage proposal.  Those comments will be submitted to the agency in the weeks and months ahead.

The CFPB last week extended the comment period for portions of the mortgage proposals that address the definition of "finance charge" as it relates to mortgage loans and the agency's high-cost mortgage coverage test under the Home Owners Equity Protection Act until Nov. 6.

Comments on proposed changes to loan estimate and closing disclosure form requirements, as well as other aspects of the mortgage proposal, will also be accepted until that date.

For the full CUNA comment letter, use the resource link.


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