In its ongoing efforts to promote business transparency, the Consumer Financial Protection Bureau (CFPB) is proposing a plan that would allow banks to test new mortgage disclosures for borrowers on their own.
Citing that accurate and effective disclosures are critical in helping Americans understand the costs, benefits, and risks of different financial products and services, the CFPB is calling on its authority from Congress to develop rules that ensure consumers receive the full extent of service and that companies comply with those rules.
Part of the authority from Congress includes empowering the CFPB to provide a legal “safe harbor” to companies creating revised disclosures. And for the disclosures the CFPB approves, the bureau will deem participating companies “to be in compliance with” or “exempt from” otherwise applicable federal disclosure requirements for a defined period.
The CFPB releases its proposal regarding trial disclosure programs with the intent for the policy to encourager banks, thrifts, credit unions, and other financial services companies to innovate by offering and executing such programs.
CFPB’s proposed policy contains four sections:
Section A describes which proposed programs will be considered eligible for a temporary waiver. Section B lists factors that decide whether to approve a proposed program for a waiver. Section C details CFPB’s procedures for issuing waivers, and Section D describes how the agency will disclose information about these trial programs.
The CFPB’s proposal for a trial mortgage disclosure program comes almost a month after the agency issued an extension for new mortgage disclosures set to take effect in January.
Written by Jason Oliva