CFPB begins design of new mortgage disclosure forms
Over the next few months, the Consumer Financial Protection Bureau will begin revising and posting drafts of new mortgage disclosure forms lenders will be required to provide. The Dodd-Frank Act mandates the new federal agency to combine the Truth in Lending Act and Real Estate Settlement Procedures Act forms for borrowers to better understand terms of a mortgage. The agency is required to issue a proposal within 18 months of opening, which is scheduled for July 21. However, lawmakers continue to spar over how the agency will operate and who will lead it. The CFPB is meeting with other regulators, researchers, industry representatives, graphic designers and consumer advocates, as it tinkers with the design of the disclosure forms, versions of which will be available on its website. The agency also will visit six cities to test the drafts. Staff will interview consumers, lenders and brokers during these visits to discern what is helpful and what is confusing. The six cities include: Albuquerque; Baltimore; Birmingham; Chicago; Los Angeles; and Springfield, Mass. "After five rounds of this testing, in six cities and with your input online, we expect the revised form to be a lot better than the old ones," the CFPB said Wednesday. "Then, after consulting with other regulators and small businesses, we will issue a proposed rule and give the public a chance to submit written comments on the revised form." After the comment period, the CFPB will conduct one last test and issue a final rule that includes the new form. "We hope our continued outreach will allow us to make the disclosure better and better, learning what works and what doesn’t, until we have a product that makes a real difference for consumers," the agency said. Write to Jon Prior. Follow him on Twitter @JonAPrior.