Three financial services groups urged the CFPB last Friday to delay the next stage of its Know Before You Owe initiative until after the RESPA-TILA integrated disclosure rule is fully implemented and its impact can be measured.
The groups, including the American Bankers Association, Housing Policy Council of the Financial Services Roundtable and Mortgage Bankers Association, said that though the RESPA-TILA rule is intended to simplify consumer disclosures and eliminate surprise costs, “it makes more sense to wait until after the new rule is fully implemented before delving further into the closing process” with the next stage of KBYO.
In November, the CFPB released its integrated RESPA-TILA rule that includes key changes to disclosure requirements, a three-day waiting period between disclosures and closing and limits on closing cost increases.
Effective August 1, 2015, new mortgage forms must be provided to consumers detailing their options and costs to improve their understanding and to help with comparison shopping.
“Considering that the [RESPA-TILA] rule is more than 1,800 pages long and issued so recently, there has been little time so far to study it, let alone consider its implications,” the letter said. “At the time the rule was issued, resources that could have been brought to bear to begin to consider the issues raised by it have been devoted exclusively to implementing the many new Dodd-Frank rules.”
The groups said the one-month comment period on the RESPA-TILA disclosure rule was “insufficient as well as premature,” adding that the CFPB should address closing issues identified by consumers through revisions to its “Special Information Booklet” and by publishing educational materials on its website.
“Making such materials available could complement, rather than confuse the implementation of the RESPA-TILA rule,” the letter said.