The Consumer Financial Protection Bureau (CFPB) is going a slightly new direction with its Know Before you Owe campaign by asking for feedback on a comparison between two different types of loan products using its simplified mortgage disclosure form.
“We’re shifting gears for a simple reason: Comparing two versions of a form is useful, but in the real world, consumers should be able to use disclosures to compare different loan offers, not different forms,” says Patricia McCoy in a statement on the initiative’s weblog. “We want to make sure the disclosure actually helps consumers understand features of competing loan products, from the overall loan amount to estimates of taxes and insurance costs.”
In May, the CFPB announced its intentions to craft a new disclosure form that would combine the Truth in Lending disclosure into a single form with the Good Faith estimate, per a Dodd-Frank mandate.
Since then, it has released three rounds of drafts and has asked for feedback regarding the form’s design, the way it presents closing costs, and suggestions for highlighting and clarifying confusing sections.
The CFPB plans to test these the loan comparisons form in the Springfield, Mass. area for a week, and is looking for consumer and industry feedback as to whether or not the form is missing important information, or could be more effective if presented differently.
View the comparison forms and weigh in here.
Written by Alyssa Gerace