Posted by John Graetz, Advisory principal, Deloitte & Touche LLP on August 12, 2016
The Consumer Financial Protection Bureau’s (CFPB) “Know Before You Owe” mortgage disclosure rule became effective in October 2015. During the implementation of the rule, financial institutions encountered scenarios where the path to compliance was complex and resulted in uncertainty on the part of lenders and vendors, as well as additional costs due to revised disclosures. On July 29, 2016, the CFPB proposed1 updates intended to formalize guidance on the rule and provide greater clarity and certainty in four key areas as follows:
Although the banking industry viewed the proposed amendments favorably, as they addressed several industry concerns; the CFPB has not yet addressed the following questions areas:
The proposed amendments are open for public comment until October 18, 2016, during which time respondents may also suggest that the CFPB address areas not covered by the proposal. Further updates and clarity are expected, and the industry is hopeful that the CFPB has taken steps in the right direction.
Change and ambiguity relative to regulatory implementation is challenging by nature, and Deloitte Advisory’s Regulatory and Compliance group is positioned to support financial institutions through the future “Know Before You Owe” implementation. We can assist with all phases of the assessment and implementation, including development of an action plan, change management, or transactional testing.
1Bureau of Consumer Financial Protection, “Amendments to Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z), (July 29, 2016), available at http://www.consumerfinance.gov/documents/769/20160728_cfpb_Amendments_to_Federal_Mortgage_Disclosure_Requirements_Under_TILA.pdf.
2American Banker, “CFPB Punt on TRID Errors, But Offers Plenty More for Lenders,” (July 29, 2016), available at http://www.americanbanker.com/news/law-regulation/cfpb-punts-on-trid-errors-but-offers-plenty-more-for-lenders-1090503-1.html.