ICBA is encouraging community bankers to call on the Consumer Financial Protection Bureau to adopt an ICBA proposal to improve mortgage disclosures required under TILA-RESPA Integrated Disclosure rules.
Proposal: Under the ICBA proposal—which the CFPB publicly released in a blog post this week—the bureau would test modified disclosures for consumer construction and construction-to-permanent loans, which are a core offering of community banks in many local communities.
Background: In proposing the change to the CFPB, ICBA noted that the current disclosure regime is designed primarily for standard home purchase or refinance mortgage transactions, so it does not adequately disclose the components of construction loans. ICBA worked with a group of community bankers, two technology vendors, and the Community Bankers Association of Illinois to develop this proposal.
Key Benefits: ICBA is encouraging community banks who support updating the TRID Loan Estimate and Closing Disclosure to tell the CFPB that improving TRID disclosures would:
Support consumers by providing greater clarity about the loan process and the overall costs to build and finance their home.
Streamline the process for community lenders by clarifying disclosure requirements and addressing compliance challenges that have dissuaded some lenders from offering these loans in their communities.
Expand access to more affordable homes in rural areas with limited housing supply and where building a home may be the best or only option for first-time homebuyers.
Submitting Comments: Community bankers can read ICBA’s application and submit comments on the proposal by the March 29 deadline via the CFPB’s blog post.
