CFPB Releases Final TILA-RESPA Combined Disclosure Rule

The Consumer Financial Protection Bureau (CFPB) released its long-awaited final rule for Integrated Mortgage Disclosures under RESPA and TILA this week.  The new rule is a requirement of the Dodd-Frank Act, which mandates that the CFPB publish rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan.

The Northwest Credit Union Association advocated for a number of changes to the rule in a letter submitted to the CFPB on Nov. 6, 2012, including allowing at least one year for implementation after the rule is adopted. The CFPB agreed, and the rule will be effective on Aug. 1, 2015.

The Association strongly encouraged the CFPB not to change the definition of the Annual Percentage Rate and to not require credit unions to adopt machine-readable record keeping in the proposed rule. In the final rule:

  • The CFPB is not including the so-called “all-in APR.” This provision in the proposal would have changed the definition of the finance charge, which is used to calculate the annual percentage rate. The change might have cost credit unions a lot and affected the types of loans available to their members.
  • The CFPB is going to do additional study of machine-readable record retention and spend more time discussing it with stakeholders before requiring any particular standard.

“The final rule is far better than what was initially proposed” said John Trull, director of regulatory advocacy for the Association. “We need to credit the CFPB for listening and the credit unions that collectively raised concerns.”

The final rule requires that credit unions use the CFPB’s new disclosures, puts in place rules about when the new forms are given to the member, and limits how the final deal can change from the original loan estimate. The forms are available in English and Spanish.

  • The Loan Estimate: This form will be provided to consumers within three business days after they submit a loan application. It replaces the early Truth in Lending statement and the Good Faith Estimate, and provides a summary of the key loan terms and estimated loan and closing costs. Consumers can use this new form to compare the costs and features of different loans.
  • The Closing Disclosure: Consumers will receive this form three business days before closing on a loan. It replaces the final Truth in Lending statement and the HUD-1 settlement statement, and provides a detailed accounting of the transaction.

The CFPB conducted more than two years of extensive research, testing and review to find out how to create mortgage disclosures that do what the law intended them to do: disclose information in a way that consumers can understand.

The NWCUA is currently studying the final rule’s 1,888 pages to prepare a detailed Compliance Bulletin for member credit unions. In addition, the Association plans to create a set of RIPT implementation tools for this new rule.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.