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CFPB Issues Proposal to Modify TILA-RESPA Rule

Mon, Oct 20, 2014

Washington, District Of Columbia

The CFPB issued a proposed rule to modify and make technical amendments to its Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) final rule. Comments are due to the agency by November 10, 2014. The proposed rule would amend section 1026.19(e)(3)(iv)(D), which states that, in order to revise the estimated amounts used to determine good faith pursuant to section 1026.19(e)(1), creditors must re-disclose interest rate dependent charges and loan terms on the date that the rate is locked. Under the proposal, the CFPB is proposing to relax the timing requirement to state that creditors must provide a revised disclosure no later than the next business day after the date the rate is locked, instead of the same date.

The Bureau is also proposing to amend section 1026.37(m) to provide for the placement of language relating to certain new construction loans on the Loan Estimate form that is required in order for creditors to re-disclose estimated charges. Specifically, the Bureau is proposing to add a new section 1026.37(m)(8), under the master heading “Additional Information About This Loan” and under the heading “Other Considerations,” to allow creditors to make the statement that the creditor may issue revised disclosures on the Loan Estimate in situations where construction loans are reasonably expected to close more than 60 calendar days after the initial Loan Estimate is provided.

Finally, the proposal would make several technical, non-substantive amendments to the final rule to correct and update various citations and cross-references in both the regulatory text and commentary sections of the rule, including an amendment to section 1026.36(g)(2)(ii), adopted by the 2013 Loan Originator final rule, to provide for placement of the NMLSR ID on the integrated disclosures. The agency indicates in its release that it does not believe that these proposed changes will affect industry’s ability to implement the rules on time for the August 1, 2015 effective date, and no changes have been proposed to amend the current effective date of the final rule. CUNA will be preparing a more detailed comment call in the coming days relating to the proposed rule.