The CFPB and the path to TILA-RESPA
A short history of the bureau
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Let’s take a second to learn a bit more about the Consumer Financial Protection Bureau (CFPB), and the path this government agency took for drafting the new TILA-RESPA Integrated Disclosure rule.
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed and signed into law. It established the CFPB, and, along with other goals, charged it to combine the Truth in Lending and Real Estate Settlement Procedures Act disclosures.
From that point forward, design began on the initiative to combine the TILA and RESPA disclosures. In May 2011 the “Know Before You Owe” project was launched along with the first two prototypes of the loan estimates. The CFPB asked consumers and industry to examine the prototypes for feedback on what did and didn’t work, and repeated the process for several rounds. Over the course of the next ten months, people submitted more than 27,000 comments.
In January of 2012, Richard Cordray was appointed the Director of the CFPB, which was starting to wind down the design process of the prototypes. They finally issued TILA-RESPA “Final” Integrated Disclosure Rule in November 2013, which at a high-level dictated the following changes that will go into effect on August 1, 2015:
· HUD-1 replaced by Closing Disclosure Form (CDF)
· Initial TIL and GFE replaced by the Loan Estimate (LE)
· Significant operational and process changes for lenders to meet strict regulations including the Three Day Rule
· Implementation is not staggered; all regulations go-live on August 1, 2015
The CFPB has a fairly extensive timelineof the process of which the Loan Estimate and Closing Disclosure forms were developed. It also shows the prototypes of the forms at each of the major design points during the process. There’s even an interactive timeline on the CFPB’s main page for “Know Before You Owe”near the bottom that walks you through with a slide show.
For more information on the impact to the industry and technology solutions that can help your business meet those timeframes, visit the TILA-RESPA Knowledge Center.
All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.