The Consumer Financial Protection Bureau (CFPB) announced recently that it has created two alternative prototype forms that are designed to combine the consumer disclosures required by the Truth in Lending Act and the Real Estate Settlement Procedures Act (RESPA).
The CFPB will use both in a testing process that will last for several months in preparation for the formal proposal of a single form. The agency said that it plans five rounds of evaluation, comment and revision before settling on a final form. The process will use forms in both English and Spanish.
The prototypes both offer disclosures for a $216,000 adjustable rate mortgage loan. They combine the disclosures required by the current RESPA Good Faith Estimate of Closing Costs and the current Truth in Lending disclosures in two-page formats. By selecting the right options, it is possible not only to review the two prototypes but also to comment on which of the two is better and why. The CFPB's webpage (LINK) also offers separate comment possibilities for consumers and industry participants.
The testing and public feedback process will enable the CFPB to revise the design and adjust the content based on how it works for consumers to develop a single form that will officially replace the dual TIL and RESPA disclosure requirements.