The Consumer Financial Protection Bureau will roll out a new mortgage disclosure form in the coming months, which lenders will be required to share with borrowers during the lending process. The agency is mandated under Dodd-Frank to combine the Truth in Lending disclosure and the Good Faith Estimate into a single form.
The CFPB’s “Know Before You Owe Project,” announced via the agency’s website, aims to combine the forms and involve consumers in the process. The agency will share drafts of the new disclosure forms through the site, and says it plans to conduct five rounds of testing, in six cities. The process will allow for consumers to comment on various stages of the drafting, and contribute input and feedback in developing the new disclosure forms.
“We are making this project a priority because today, the two current forms have overlapping information and can be confusing to consumers. They also needlessly drive up costs and the regulatory burden on lenders,” the CFPB said on its website.
After public testing and consulting with other regulators and small businesses, the CFPB will issue a proposed rule and give the public a chance to submit written comments on the revised form. After a final round of changes and another possible test, the agency will unveil the new disclosure form.
Find out more about the new disclosure process.
Written by Elizabeth Ecker