MCUL submitted a comment letter to the CFPB in response to its proposal to integrate the Truth in Lending Act and Real Estate Settlement Procedures Act disclosures as required by the Dodd-Frank Act. MCUL supports the goal of streamlining mortgage disclosures, but fears the length of the rule and the level of detail provided will require an extensive amount of time and legal fees to ensure compliance – all in an effort to reduce the amount of paper provided to borrowers from an average of 10 pages to an average of six – a savings of just four pages.
MCUL is strongly opposed to the proposed provisions to amend the definition of “finance charge,” as well as the proposal to require creditors to adopt a machine-readable electronic format to retain mortgage loan records. MCUL does not support the justifications provided in the proposed rule, and believes further regulatory action would become necessary to rectify the unforeseen consequences of such requirements.
Given the overwhelming amount of regulations mandated by the Dodd-Frank Act that credit unions will be required to adhere to during the course of the next 12-18 months, credit unions, especially those small credit unions that make up a majority of the institutions in the industry, can ill afford any additional and unnecessary regulatory burden.
The CFPB requested comment on “whether the level of detail in the proposed regulations and guidance … will make compliance more, rather than less, burdensome and whether the bureau should adopt a less prescriptive approach in the final rule.” MCUL is hopeful that the CFPB will in fact adopt a less prescriptive approach and publish a final rule that does not compare in volume with the 1100-plus pages contained in this proposal.