CFPB to Congress: ICBA mortgage disclosure proposal could benefit housing market

The Consumer Financial Protection Bureau promoted its recent approval of ICBA’s proposed template to improve mortgage disclosures in testimony before Congress.

CFPB Testimony: CFPB Office of Competition and Innovation Assistant Director Ann Epstein told a House subcommittee that ICBA’s Trial Mortgage Disclosure Sandbox Template proposal could benefit the U.S. housing market, particularly in rural areas. The ICBA proposal is the first application approved under the CFPB’s trial disclosure policy and illustrates how the bureau can collaborate with private industry to address market needs, she said.

Disclosure Template: Under ICBA’s proposal, the bureau would permit community banks to test modified TILA-RESPA Integrated Disclosures for consumer construction and construction-to-permanent loans. Using existing TRID disclosures for construction loans can be confusing, leading some creditors to avoid making these loans due to compliance concerns.

CFPB Announcement: In a blog post announcing its approval of the template last month, the CFPB said individual lenders can apply for approval to test the alternative disclosures for construction loans. Following the announcement, ICBA said the pilot program will help improve mortgage disclosures for both lenders and borrowers.

Outlook: Community bankers who wish to be included in the testing process should contact ICBA Senior Vice President of Housing Finance Policy Ron Haynie at [email protected] for more details.