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MCUA Urges Changes to CFPB's TILA-RESPA Rule

On November 6, 2012, the Missouri Credit Union Association (MCUA) filed a comment letter with the Consumer Financial Protection Bureau (CFPB) on the agency’s proposed rule to amend Regulation Z, Truth in Lending Act (TILA), and Regulation X, the Real Estate Settlement Procedures Act (RESPA).

In the letter MCUA offered a number of recommendations that, if adopted, would mitigate the impact of the CFPB's proposed rule requirements on credit unions.  In general, MCUA supports the objective of simplified and combined mortgage disclosures, but the rule, as proposed would be extremely burdensome for credit unions in many respects.  To ease these burdens, MCUA urged the agency to consider a number of recommendations, including:

  • Exempting credit unions from certain portions of the final rule to minimize costs for credit unions where possible;
  • Providing further clarity concerning the definition of “application” under RESPA for purposes of requiring the issuance of the CFPB’s proposed Loan Estimate;
  • Issuing specific guidance regarding how to handle mortgage loan transactions that are initiated under existing Regulation Z and Regulation X rules, but are not yet consummated as of the time that new rules become effective;
  • Eliminating portions of the proposal that would require lenders to maintain “standardized, machine-readable” electronic versions of Loan Estimates and Closing Disclosures provided to consumers; and
  • Allowing a lengthy implementation period and a delayed mandatory compliance date that is at least 18 to 24 months after the adoption of any final rule being issued.

For a link to MCUA's comment letter, click here.