Responding to the Consumer Financial Protection Bureau's (CFPB's) call for feedback on proposed new mortgage disclosure forms, the American Bankers Association (ABA) has commended the bureau for their initial step, but noted challenges to be addressed before new disclosures can be implemented.


In their response to the CFPB, the ABA points to several key issues that limited their ability to fully evaluate the proposed draft forms posted by the CFPB on their "Know Before You Owe" page.  The notice of the draft disclosures does not include the proposed timing of the new disclosures, nor the forms that would be replaced should the new forms be implemented.  Without this context, the ABA states, it is difficult to to determine whether the changes are meaningful and can be effectively implemented by banks.

Of the two options presented by the CFPB, the ABA focused their response to "Option A," that is labeled as "Ficus Bank."  In their opinion it is the clearest presentation of the information of the two options offered.

Among their recommendations, the ABA suggests that "points" and "cash needed to close" be added to the "key loan terms" section.  Additionally, the organization points to how the "estimated closing costs" sum different charges together.  Although a summarized itemization is helpful, the form should also allow for the ability to itemize all closing costs.

In the overall look and formatting of the forms, the ABA warned that the use of graphics, columns and horizontal lines could present challenges for industry participants to replicate.  A simplification of graphics and formatting is recommended.

It is unclear whether the proposed forms are intended as initial disclosures or part of the final disclosures, but the ABA recommends that the same form be used both initially and as part of the final disclosures.  A consistent form would allow consumers to better understand the forms through the process and more easily compare them.

Recognizing that these forms were represented as an initial draft by the CFPB, the ABA reserved more detailed comments for later in this process. 

The CFPB has encouraged both consumers and industry participants to provide feedback on the proposed disclosures at "Know Before You Owe."  The bureau has not set a time table for this process but has noted it will be accomplished over the coming months.  In the first round of feedback, the CFPB states that they received more than 10,000 comments on the new forms.