WASHINGTON—America’s Credit Unions is urging the Consumer Financial Protection Bureau to modernize federal mortgage disclosure requirements, arguing that overly technical rules impose disproportionate costs on credit unions and can unnecessarily delay mortgage closings.
In an Aug. 10 letter responding to the CFPB’s request for information on promoting access to mortgage credit, ACU backed a tailored, risk-based approach to the Truth in Lending Act and Real Estate Settlement Procedures Act integrated disclosure requirements, known as TRID.
ACU recommended that the CFPB establish a materiality-based framework under which additional disclosures, waiting periods and heightened requirements would generally be reserved for changes that could meaningfully affect a borrower’s decision, including changes to the annual percentage rate, loan product, prepayment penalties or cash needed to close. The trade group also called for safe harbors covering minor or technical disclosure errors that do not affect pricing, terms, cash to close or a consumer’s understanding of the transaction.
ACU said current redisclosure and timing requirements can force credit unions to move closing dates, extend rate locks, reschedule settlements and delay funding even when there has been no material change to a loan. ACU urged the CFPB to provide greater flexibility when changes are immaterial or favorable to consumers and to consider allowing borrowers, under documented time-sensitive circumstances, to waive or shorten certain waiting periods beyond the existing exception for a “bona fide personal financial emergency.”