CFPB Pushes Back January Compliance Date For Mortgage Disclosure Requirements

November 19, 2012 at 9:25 am 2 comments

Sorry for the delay in this morning’s blog but there was a highly  technical problem that I just discovered: I forgot to hit the publish button.

 Rarely do the words “good news,” “Dodd-Frank,” and “the CFPB” belong in the same sentence, but here it goes:  financial institutions actually got a bit of good news from the CFPB on Friday afternoon when it announced it was delaying the effective date of several disclosure requirements mandated by Dodd-Frank that were  scheduled to take effect on January 21, 2013.  The affected disclosures, which are too numerous to list in this blog, include the warning regarding negative amortization features and several escrow disclosure requirements among other little nuggets of wisdom mandated by Congress.

The affected disclosures will instead be timed to take effect in conjunction with disclosures that will replace existing Good Faith Estimate and closing statements.  The integrated mortgage disclosures also will not be ready by January 21, and the Bureau has correctly decided that the best way to avoid consumer confusion as well as minimize the compliance burden is to come up with a unified set of final regulations.  This, of course, still means that at some point all these new proposals will be taking effect but at least we will get more time to prepare and we won’t be getting the final regulatory monstrosity in piecemeal fashion.

The Dodd-Frank Act generally gave regulators 18 months after enactment to promulgate regulations mandated under the Act or the provisions would become self-executing.  Without the delay, financial institutions would have to fend for themselves as to how best to comply with often generally worded legislation without the guidance of the regulators who will assess whether or not they are in compliance.  The Bureau is exercising this authority pursuant to its power under the Act to exempt or modify disclosure provisions if it is determined that doing so is in the consumers’ and public’s best interest.

Every time I reread a portion of Dodd-Frank, I’m shocked by what an absolute abdication of legislative responsibility this Act represents.  Congress dealt with complicated issues by drawing up a to do list in the form of legislation and dumped all the complicated issues onto unelected regulators.  But no need to be too negative today since the stay of execution is actually good news.

I have to end the blog so I can run out to Stewart’s and hoard as many cupcakes as I can find now that Hostess is going out of business.  You can cringe all you want but the two things that I know are going to  survive in  the event of nuclear disaster are cockroaches and Twinkies.

Entry filed under: Compliance, Regulatory. Tags: , , , .

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2 Comments Add your own

  • 1. Ellen Drollette  |  November 19, 2012 at 10:04 am

    Then again, maybe the reason cockroaches will last forever is because they already eat Twinkies………Hmmm

    Reply
  • 2. Anonymous  |  November 20, 2012 at 8:21 am

    it!s that kind of insight that makes this blog an essential source of news and information. Thanks for reading.

    Reply

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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