NAFCU statement on CFPB’s “Know Before You Owe” final rule
WASHINGTON, DC (November 20, 2013) — National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger today made the following statement regarding the final rule issued today by the Consumer Financial Protection Bureau (CFPB) requiring “Know Before You Go” mortgage disclosure forms that lay out the terms of a mortgage for a homebuyer. The rule is set to take effect Aug. 1, 2015.
“NAFCU has long supported combining the mortgage disclosures required under the Truth in Lending Act and Real Estate Settlement Procedures Act so that there’s less consumer confusion and also decreased regulatory burden on credit unions,” said Berger. “While we will study the rule to determine its full impact on credit unions, we are pleased that the final regulations reflect NAFCU-sought recommendations to not include an all-inclusive definition of APR and “finance charge.”
“We are further pleased that the final rule, unlike the proposal, does not require credit unions to provide total cost of funds of the disclosures; it does not add Saturdays to the definition of “business day”; and it does not require credit unions to keep a machine-readable version of the disclosures.”
“Although the CFPB’s rule combines the disclosures, we believe that the underlying regulations will complicate the process of the mortgage loan transaction. In particular, we are concerned with the rule’s inflexibility in regard to changes that can be made to estimates given in the Loan Estimate and to provide borrowers the Closing Disclosure three business days prior to consummation. NAFCU will push back where necessary to ensure that the benefits of combining the current TILA and RESPA disclosures are not diluted by the costs and burdens associated with the underlying regulations.”
The National Association of Federal Credit Unions is the only national organization that focuses exclusively on federal issues affecting credit unions, representing its members before the federal government and the public.