CFPB Convenes Small Business Panel for Know Before You Owe Mortgage Disclosures

Consumer Financial Protection Bureau Convenes Small Business Panel for Know Before You Owe Mortgage Disclosures
Panel is Bureau’s First Under Small Business Regulatory Enforcement Fairness Act

The Consumer Financial Protection Bureau (CFPB) is announcing today the formation of a Small Business Review Panel as part of its initiative to integrate the mortgage disclosure forms that borrowers receive when applying for and closing on a loan. The review panel will solicit feedback from small businesses that make mortgage loans and conduct mortgage closings.

“This is another step in the CFPB’s wide-ranging efforts to gather the input of the people who will be affected by our rules. The CFPB is dedicated to issuing thoughtful, research-based rules that take into account not only the benefits to consumers but also how businesses of all sizes will be affected,” said CFPB Director Richard Cordray. “We take all feedback seriously.”

The CFPB began its Know Before You Owe initiative to combine mortgage loan disclosure forms in May 2011. The project integrates two federally required mortgage disclosures into a single, simpler form that makes the costs and risks of the loan clearer for borrowers. Combining and simplifying these forms will also reduce burdens on lenders.

For more than thirty-five years, two federal laws (the Truth in Lending Act or “TILA,” and the Real Estate Settlement Procedures Act or “RESPA”) have required lenders and settlement agents to give consumers who take out a mortgage loan different but overlapping disclosure forms regarding the loan’s terms and costs. This duplication has long been recognized as inefficient and confusing for consumers and industry. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is responsible for solving this problem by combining the disclosures.  Read more.