by Amber Cushman – DocuTech Compliance Attorney
The CFPB’s amendments to Regulations X and Z will become effective on January 21, 2013. See Dodd-Frank section 1500(c)(3). The amendments include the integrated RESPA-TILA disclosures and Dodd-Frank Act Title XIV disclosures. See 12 USC 2603(a); 15 USC 1604(b). While the integrated TILA-RESPA disclosures do not have a final implementation date set, the Title XIV disclosures were set to become effective on January 21, 2013. The CFPB has proposed a delay in implementation of affected Title XIV disclosures so they will be effective at the same time as the integrated TILA-RESPA disclosures. See 77 FR 5116 (Aug. 23, 2012). The delay in implementation would temporarily exempt regulated entities from compliance with rules that would otherwise be effective January 21, 2013. See proposed amendment to Regulation Z section 1026.1(c). The final rule, which would trigger implementation of the disclosures, will become effective on the date published in the Federal Register. See 5 USC 553(d).
The CFPB’s analysis of the proposed temporary exemption has led them to conclude that delaying implementation will not increase the costs or burdens on entities subject to the Dodd-Frank Act. The CFPB performed separate analyses for small businesses as well and concluded the delay in implementation would not increase the burden or costs on such businesses, notwithstanding the cost of implementation when it becomes effective. The CFPB further believes the delay would benefit consumers because the disclosure implementation would be coordinated with other disclosures required.
The disclosures affected by the proposed delay in implementation include disclosures related to specific mortgage features, such as negative amortization or variable rates; disclosure of state law anti-deficiency protection; disclosures regarding escrow and impound accounts that are provided both prior to and after consummation of a transaction; repayment analyses including escrow and impound accounts; and disclosures regarding availability of copies of appraisals and the costs of appraisals.
A full list of Title XIV disclosures affected by the delay in implementation provided by the CFPB is as follows:
- Warnings regarding negative amortization features. Dodd-Frank Act section 1414(a); TILA section 129C(f)(1)
- Disclosure of State law anti-deficiency protections. Dodd-Frank Act section 1414(c); TILA section 129C(g)(2) and (3)
- Disclosure regarding creditor’s partial payment policy prior to consummation and, for new creditors, after consummation. Dodd-Frank Act section 1414(d); TILA section 129C(h)
- Disclosure regarding mandatory escrow or impound accounts. Dodd-Frank Act section 1461(a); TILA section 129D(h)
- Disclosure prior to consummation regarding waiver of escrow in connection with the transaction. Dodd-Frank Act section 1462; TILA section 129D(j)(1)(A)
- Disclosure of monthly payment, including escrow, at initial and fully-indexed rate for variable-rate residential mortgage loan transactions. Dodd-Frank Act section 1419; TILA section 128(a)(16)
- Repayment analysis disclosure to include amount of escrow payments for taxes and insurance. Dodd-Frank Act section 1465; TILA section 128(b)(4)
- Disclosure of aggregate amount of settlement charges, amount of charges included in the loan and the amount of such charges the borrower must pay at closing, the approximate amount of the wholesale rate of funds, and the aggregate amount of other fees or required payments in connection with a residential mortgage loan. Dodd-Frank Act section 1419; TILA section 128(a)(17)
- Disclosure of aggregate amount of mortgage originator fees and the amount of fees paid by the consumer and the creditor. Dodd-Frank Act section 1419; TILA section 128(a)(18)
- Optional disclosure of appraisal management company fees. Dodd-Frank Act section 1475; RESPA section 4(c)