WASHINGTON (11/19/12)--The Credit Union National Association (CUNA) on Friday noted that without the effective date delay announced by the Consumer Financial Protection Bureau (CFPB) for several mortgage disclosures, credit unions and other lenders would have had to change their disclosure forms twice.
Final versions of new mortgage regulations, and related disclosures that combine elements of Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into a single document are expected to be released in January. The CFPB is also developing rules to implement these disclosure form changes, and other related disclosures.
The disclosure changes and rules are expected to become effective sometime next year, according to the CFPB. An exact effective date has not been determined.
The CFPB on Friday said mortgage providers will not need to provide certain disclosures until after the CFPB's previously proposed mortgage disclosure rules are finalized. The provisions that the CFPB will delay are:
- Warning regarding negative amortization features;
- Disclosure of state law anti-deficiency protections;
- Disclosure regarding creditor's partial payment policy;
- Disclosure regarding mandatory escrow accounts;
- Disclosure regarding waiver of escrow at consummation;
- Disclosure of monthly payment, including escrow, at initial and fully-indexed rate for variable-rate transactions;
- Repayment analysis disclosure to include amount of escrow payments for taxes and insurance;
- Disclosure of settlement charges and fees and the approximate amount of the wholesale rate of funds;
- Disclosure of mortgage originator fees;
- Disclosure of total interest as a percentage of principal; and
- Optional disclosure of appraisal management company fee.
The CFPB said that timing the effective date of the delayed disclosures to coincide with the effective date of broader TILA/RESPA changes "would ensure that the features of consumer credit transactions secured by real property are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the product or service, in light of the facts and circumstances."
CUNA President/CEO Bill Cheney noted that in virtually every meeting with the CFPB, and in every comment letters CUNA has sent on these issues, CUNA has urged an effective date delay. "We're grateful that the CFPB listened to us," he said.
"This extra time will give CUNA and our members more opportunities to urge the agency to minimize the impact of these proposed rules on credit unions," Cheney added. However, Cheney noted that other CFPB rules that CUNA continues to be concerned about, such as rules addressing mortgage servicing and ability to repay rules, are not delayed and are still expected by Jan. 21.