First Order of Business For CFPB, Consolidate TILA and RESPA Mortgage Docs

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.

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  • I have a difficult time trying to understand why some on the right are trying to demonize Elizabeth Warren. She seems to be the only one around trying to find real solutions for the borrower that don’t actually have a negative impact on the borrower like so many other regulations that have recently passed.

    • Michael,

      It is rarely the agenda politicians promote which makes them acceptable or not. It is what is on their agenda and is not being openly addressed which is generally most troubling. Forget about Republicans or Democrats, it is her reported bias on reverse mortgages which troubles me the most.

      Ms. Warren has taken no overt public position on reverse mortgages. Yet the groups which openly support her the most are the very groups which have most vigorously attacked our industry with old and discredited horror stories about reverse mortgages. For example, on October 6, 2009, RMD reported that one of the biggest supporters of Ms. Warren, the National Consumer Law Center (“NCLC”), came out with their take on reverse mortgages titled: “Subprime revisited.”

      As to one link between Ms. Warren and NCLC, please see the comments of Frank J. Lautz, an attorney and HECM counselor, under the article dated December 8, 2010, titled: “Reverse Mortgage Industry Calls Consumer Union Report Highly Misleading.” His comments starting on December 13th in that string of comments forward are quite revealing. Frank specifically states that Ms. Warren privately has stated that she is not “fond” of reverse mortgages.

      The NCLC has taken out ads promoting the appointment of Ms. Warren to the Director of the CFPB and she has written several complimentary statements regarding the NCLC which are prominently displayed on their website.

      When there is the possibility that the CFPB Director will be creating rules and regulations about reverse mortgages which are based on false, outdated, and inaccurate impressions of our industry, there is reason for concern.

  • I don’t care what label is on the bottle- you have to find out what is inside the bottle to verify the contents. On the issue of “consumer protection”, my question is “Protection for who and from what?” The folks who brought the “net tangible benefit police” to the forward world should be coming unstuck with the way companies are advertising 7-year ARMs right now. “Why obligate yourself to an interest rate for 30 years and pay thousands of dollars in extra interest when you may not live there past 2018?” the announcer says on my radio. Consumers have a right to know the facts but they should also have the right to make their own choice, even if that choice is a poor one. But if some politians have their way, we will be told not just what kind of loan we can have but what we can and cannot eat…afterall, it’s just for our own good!

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