ARLINGTON, Va.—NAFCU has told the CFPB that when it comes to two modifications to Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act and the Truth In Lending Act (TILA/RESPA Final Rule), the intentions are good but additional changes need to be made.
The proposal would amend Section 1026.19(e) by relaxing its timing requirements such that creditors must provide revised disclosures of interest rate dependent charges and loan terms by the next business day after the day the rates lock, instead of the on the same day. In addition, the proposal would amend Section 1026.37(m) to allow inclusion of new construction loan-related language on the Loan Estimate form.
Noting that the CFPB has acknowledged that creditors often do not control when an interest rate locks and that there are serious and ongoing operational challenges involved with same-day re-disclosure of the Loan Estimate, NAFCU said the CFPB has further stated that a same-day requirement would likely result in limitations on consumers’ ability to lock their interest rates to times early in the business day.
“Credit unions strive to provide customized, exemplary service to their members, many of whom work throughout the typical business day,” NAFCU said. “That often means credit unions stay open and their staff work late hours to accommodate their members’ needs and schedules. NAFCU appreciates the CFPB’s flexibility and understanding that the current requirement, while attempting to only punish and deter a select few rent-seeking bad actors, inadvertently prevents credit unions from being able to provide extended-hours services to their members who need them. Providing a one-business day extension serves both to limit the bad lending behavior the CFPB seeks to curb and to allow creditors to deliver flexible and valuable services. That said, even a next-business-day requirement would likely cause a reduction in the timeframe in which consumers may lock their rates. A three-business-day window to issue a revised Loan Estimate, the standard time allowed for other changes, would likely maximize creditors’ ability to serve consumer needs.”
“With respect to TILA/RESPA implementation in general, NAFCU would like to reiterate its ongoing recommendation that the CFPB provide written guidance on issues in addition to any oral guidance it provides through its hotline or webinar series,” NAFCU wrote. “The CFPB webinar series is useful to our members in answering questions they may have, but given the undeniable complexity of the rule, answers that were transcribed by the Bureau and collected in a single resource would be even more helpful. NAFCU believes reliable written guidance is essential for industry stakeholders to operate on a level playing field in implementing the regulation and protecting consumers, and will avoid unnecessary confusion and discrepancies in implementation down the road.”
Related links