WASHINGTON (2/24/12)--The Consumer Financial Protection Bureau (CFPB) should make simplification of Regulation Z a priority, and consider how the entire mortgage application and consummation process can be improved for borrowers and lenders alike, the Credit Union National Association said in a recent comment letter.
The agency should also examine lending products that are covered by the rule to determine whether current requirements facilitate the ability of consumers to understand what is being offered to them, CUNA added.
Reg Z implements the Truth in Lending Act. CUNA in the letter noted that Reg Z is among the most complex and costly regulations to implement for credit unions, and said many credit unions have asked for more flexible guidance from the CFPB and the National Credit Union Administration on multi-featured open-end lending.
Credit unions are also concerned by portions of Reg Z that address 14-day advance notice requirements and sections that govern when increased penalty rates may be applied to delinquent accounts. There is also confusion regarding when preferential loan rates can be given to employees that take out accounts at their employing financial institution and whether the length of the cycle for issuing periodic statements should match the payment frequency terms of a given loan.
CUNA is currently reviewing Regulation Z with its Consumer Protection Subcommittee and Lending Council, and will provide additional comments and recommendations to the CFPB later this year.
For the full comment letter, use the resource link.