CFPB Director Acknowledges ALTA Concerns with Three-day Rule
|July 2, 2013|
A letter from the director of the Consumer Financial Protection Bureau (CFPB) to members of Congress acknowledges the Bureau is concerned about issues regarding its proposed rule integrating mortgage disclosures required under the Real Estate Settlement Procedures Act and the Truth In Lending Act.
Richard Cordray, the CFPB’s director, was responding to recent letters written by Reps. Steve Stivers and Ed Perlmutter and co-signed by 82 members of Congress, who stated concerns with a provision in the proposal that would require that consumers receive the Closing Disclosure at least three days before closing on the loan. During ALTA's Lobby Day, Federal Conference attendees encouraged members of Congress to sign the letters. Also, members of the Title Action Network took action encouraging their representative to sign as well.
The letter from the members of Congress asked the Bureau to ensure the three-day rule doesn’t harm consumers and explore options that balance the intent of the three-day rule with how it would apply to consumers in the market.
In his letter, Corday said the Bureau is sensitive to how the three-day rule could impact consumers and business and is open to continuing the dialogue as this process moves forward. In a July 1 meeting with Michelle Korsmo, ALTA's chief executive officer, and Justin Ailes, ALTA's vice president of legislative and regulatory affairs, Cordray said that the CFPB will release its final rule “this fall.”
Currently under the CFPB’s proposal, if a fee being paid by the borrower increases or decreases during the three-day period—subject to limited exceptions—the borrower must be given an updated Closing Disclosure. This will then result in a delay of three additional business days before closing.
ALTA agrees with the members of Congress that without greater flexibility enabling consumers to accept changes within the three days, the CFPB’s proposal could result in borrowers missing contractual deadlines and potentially losing the opportunity to finance their home purchase.
The Bureau has proposed these exemptions that will not trigger a new three-day waiting period: