As widely expected, the Consumer Financial Protection Bureau (CFPB) today issued the final rules to implement the “unified disclosures” required under the Dodd-Frank Act.  Rules will go into effect on August 1, 2015. Readers who have been following this blog will recall that getting to this point has been a relatively long and in-depth process, with the agency issuing several draft documents and soliciting comment from the public and industry in a process it named “know before you owe.”

The big surprise today, however, was the length of time the agency gave to industry to implement these new requirements.  A 20-month implementation period comes as a surprise, especially in light of the compressed time period the industry has been working under to implement the oft-amended ability-to-repay and qualified mortgage rules.

In a very brief overview of the final rule (I’ll be getting much more in-depth into it over the next few months to prepare next year’s CE course), it becomes apparent the reasoning behind the extended implementation widow becomes apparent:

• There is no exemption from the rule given to small creditors, despite heavy involvement from the Independent Community Bankers of America and various State Community Bankers Associations.
• The fairly controversial provision in the proposed rule requiring borrowers to receive the new Closing Disclosure (replacement for the current HUD-1 and final TIL disclosure) three days before closing was not removed from the final rule – over the objections and warnings of many industry trade groups.

Such a long window of preparation is likely to make beleaguered technology vendors struggling with the QM/ATR implementation – such as LOS providers like Ellie Mae and Calyx – as well as compliance consulting companies, loan pricing engines and mortgage law firms, breathe a long sigh of relief.

You can find a narrative description of the disclosure initiative, as well as links to the final disclosures and the rule itself, at:

http://www.consumerfinance.gov/blog/a-final-rule-that-makes-mortgage-disclosure-better-for-consumers/

Additionally, the CFPB will be publishing the rule in the Federal Register as required by law.

Happy originating,

Peter