Warren Sees May Testing of Mortgage Forms
April 21, 2011
April 21, 2011
The Consumer Financial Protection Bureau (CFPB) is expected to begin testing prototype model mortgage forms combining Truth in Lending Act and Real Estate Settlement Procedures Act disclosures in May, according to a report in the Wall Street Journal.
Elizabeth Warren, assistant to the president and special advisor to the Treasury secretary, announced the move in conjunction with a banking conference Friday in Louisville, Ky.
Treasury, on behalf of the CFPB, on April 4 submitted a request to the Office of Management and Budget for approval of information collection, or testing of forms containing the combined disclosures.
According to that notice, the CFPB implementation team plans to conduct qualitative testing at six sites in five rounds to allow for changes to the disclosure between rounds. Testing will include consumers as well as brokers and lenders. Testing will also be carried out via social media. Treasury estimates 230 potential participants for qualitative testing and 5,000 for the social media effort.
The testing is aimed at helping to refine the forms to maximize their effectiveness in communicating information while minimizing compliance burden, the notice states.
The Dodd-Frank Wall Street Reform Act requires the CFPB to propose mortgage disclosure rules by July 21. A joint inspectors’ general report from the Federal Reserve and Treasury says that, if a CFPB director isn’t confirmed by then, Treasury retains authority to execute bureau activities, including rulemaking.
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