The first initiative for the Consumer Financial Protection Bureau (CFPB) is to consolidate the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) documents to create a form that consumers can understand, said the leader of the agency on Tuesday.
Speaking before the Independent Community Bankers Association in San Diego, Calif., Elizabeth Warren, special adviser to the Treasury Department, said the changes should also help cut down on regulatory costs for small banks and help consumers understand the terms.
“When it comes to piles of paperwork, less is better for you and your customers,” she said. “And we’ll be on the hunt for other places where we can do the same thing—find a way to give the consumer something shorter and clearer, and to cut your regulatory costs at the same time.”
Created under the Dodd Frank Act, the CFPB will become the primary regulator for the entire mortgage industry when it opens in July. Warren said the agency anticipates more than half of its budget will be put toward establishing supervision and meaningful enforcement.
“We can’t enforce the law only against the banks that are easiest to find,” she said. “Instead, we will build a strong enforcement arm that will put significant federal resources behind ensuring compliance by non-bank financial companies.”
As passed by Congress, the CFPB is also responsible for conducting a study on reverse mortgages to determine any deceptive practices and figure out whether suitability standards are necessary. It will also determine whether additional safeguards are needed to protect consumers from being sold reverse mortgages to fund inappropriate annuities, investments, and other financial products.