House Announces CFPB Mortgage Disclosure Hearing
The House Financial Services Subcommittee on Insurance, Housing and Community Opportunity will investigate the Consumer Financial Protection Bureau’s mandate to combine residential mortgage disclosures during a hearing June 20, according to a NAFCU report.
The House is currently in recess but will return June 18.
The “Know Before You Owe” project is required under the Truth in Lending Act and Real Estate Settlement Procedures Act. The Dodd-Frank Act gives the CFPB until July 21 to issue proposed rules to accompany the model disclosure forms for residential mortgages. It requires action on final rules by Jan. 1, 2013.
Combining TILA and RESPA disclosures, which the CFPB is proposing, would be problematic for credit unions, because the two disclosures detail separate steps: mortgage lending and home purchasing.
Credit unions could be required to fill out the RESPA portion of the settlement document, which would require additional expertise in home purchasing.
NAFCU said its recommendations for the model disclosures focus on consumers’ need for information, how much that information will add to their understanding of the mortgage product and whether the information is presented clearly.
Disclosing the lender’s cost of funds offers nothing meaningful to the consumer and should be eliminated from the draft forms, the trade association said.
In other Capitol Hill action, the Senate Appropriations Subcommittee on Financial Institutions, chaired by Sen. Richard Durbin (D-Ill.), will mark up fiscal 2013 legislation affecting the Central Liquidity Facility, Community Development Revolving Loan Fund and Community Development Financial Institutions Fund on Wednesday.
The full committee will hold its mark up Thursday.