After being appointed as Assistant to the President and Special Advisor to the Treasury Secretary last week, Elizabeth Warren has wasted no time getting to work.
Along with Treasury Secretary Tim Geithner, the two held a forum to seek input on the simplification of mortgage disclosure forms to ensure that consumers have the clear and easy-to-understand information they need to make the financial choices that are best for themselves and their families.
“Moving quickly to improve mortgage disclosures is one in a series of concrete steps we’re taking to implement the historic consumer protections included in the Dodd-Frank financial reform law,” said Secretary Geithner. “Wherever possible, we are committed to expediting completion of the law’s requirements ahead of statutory deadlines. Simplifying these forms is a prime example of where we can and will accelerate our efforts to deliver real benefits to consumers as soon as possible.”
The Consumer Financial Protection Bureau is charged with merging and simplifying two overlapping mortgage disclosure forms that the Truth in Lending Act (TILA) of 1968 and the Real Estate Settlement Procedures Act (RESPA) of 1974 respectively require lenders to provide to applicants.
“Fine print obscures the cost of credit and makes it impossible for families to compare products. Too often, families come to understand the legalese only when they get bitten by it,” said Professor Warren. “Streamlined disclosure can level the playing field and give families better tools to make better choices. This is particularly true in the mortgage market, where borrowers receive stacks of incomprehensible paperwork when they’re looking for a loan.”
The forum included a range of consumer advocacy groups, housing counselors, financial literacy experts, mortgage companies, and other stakeholders who provided feedback on how to improve the disclosures.
While aiming to promote efficiency and minimize the implementation burden, the CFPB implementation team is committed to getting the CFPB ready to propose a consolidated form well ahead of the Dodd-Frank Act’s July 2012 statutory deadline.