Six mortgage industry groups are urging the Consumer Financial Protection Bureau (CFPB) to preempt from state law new and improved mortgage disclosures, fearing that state interference will muddy and slow the process.
“Ideally, when the CFPB’s redesigned forms are complete, they will present clear, complete, relevant information and there should be no need for additional disclosures,” according to a joint comment letter.
“We urge the CFPB to create a uniform nationwide disclosure system and preempt inconsistent state laws,” the Dec. 5 letter said.
Otherwise, the CFPB forms will have to be altered to incorporate certain state law requirements.
The American Financial Services Association, Community Mortgage Banking Project, Consumer Bankers Association Consumer Mortgage Coalition, Housing Policy Council, and Mortgage Bankers Association all signed the joint letter.
The trade groups also want the bureau to reconsider its goal of making the redesigned good faith estimate (GFE) form a tool for comparison shopping. Years ago, consumers may have used the GFE as an aid in loan shopping, but thanks to the Internet many borrowers can compare loan terms before ever approaching a lender.
“This change obviates the need for shopping information in the CFPB’s disclosure forms provided at the time of application,” the letter says.
The CFPB has conducted several rounds of testing to perfect its redesign of the GFE that merges the disclosures required by the Real Estate Settlement Procedures Act and Truth in Lending Act. The bureau is expected to start drafting the regulations for implementation soon.
