WASHINGTON (8/29/12)--Details on any additional costs, compliance issues and operational changes the Consumer Financial Protection Bureau's (CFPB) planned mortgage disclosure changes would create for credit unions can be provided in a new Credit Union National Association (CUNA) comment call.
The comment call is the second released by CUNA on the CFPB's recently proposed simplified mortgage disclosure form and rules that implement the mortgage form changes. The proposed rules amend Regulation Z, which implements the Truth in Lending Act (TILA), and Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA). The regulations back up the changes made to the TILA and RESPA forms that homebuyers are given when they apply for and close a mortgage.
The proposed rule would require a new loan estimate form to replace current good faith estimate forms. The loan estimate form would need to be delivered within three business days after the consumer applies for a mortgage loan. The CFPB proposal would also require new closing disclosure forms to replace the existing HUD-1 Settlement Statement and the final Truth in Lending Disclosure. This form would need to be delivered no later than three business days before the consumer closes on the mortgage loan.
The mortgage form and proposed rules are scheduled to be finalized in January. Credit unions can address how much time they would need to comply with the pending regulatory changes and incorporate the new combined mortgage forms into their business practices.
CUNA is also seeking credit union comment on the CFPB's proposed changes to the definitions of "application" for purposes of delivering the loan estimate, and also to the term "business day." The "business day" redefinition has caused confusion in credit unions the past several years as Regulation Z has been amended multiple times, CUNA noted.
The proposed rule requires creditors to disclose whether a given loan is meant to fund a purchase, refinance, construction or home equity loan. Credit unions can suggest other loan purposes that could be added to this list. Credit unions can also state whether they believe minimum finance charges should be included as examples of prepayment penalties, and whether loan guarantee fees should be excluded from the prepayment penalty definition.
Potential changes to the proposal's definition of balloon payment can also be addressed in the comment call response.
CUNA has also asked for general comments on any advantages and disadvantages that may be created by requiring a standard form for the closing disclosure for federally related mortgage loans and model forms for other credit transactions. It also asked more technical questions regarding the CFPB's planned changes to loan calculation disclosures.
CUNA will accept comment until Oct. 12. The CFPB's comment deadline is Nov. 6.
For the full CUNA comment call, use the resource link.