OBSERVATIONS ON THE REGULATION Z PROPOSAL

“It’s only a proposal!” I can get carried away by big events like the 1,099 page proposal we got from the CFPB on Monday. The reminder that it is only a proposal helps keep me grounded

It is also easy to get mad at the CFPB for the massive changes moving our way, but we got to remember that Congress is the big problem. Actually the CFPB is trying to take a few heroic actions

There are some issues with dates. Some of the provisions included in yesterday’s proposal must be completed by January 21, 2013 or the provisions of the law become effective without regulations. That would be a mess. Other provisions do not have a specific date by which the rules must be finalized. The CFPB is proposing to delay the mandatory provisions to allow adequate time for the industry to implement the changes

The Dodd-Frank Act added a few disclosures, such as the cost of funds disclosure and the total interest percentage, that are pretty much worthless. The CFPB is proposing to use its exemption and modification authority to delete these two disclosures from both the Loan Estimate and the Closing Disclosure.

Proposing action and actually taking action can be two different things. Time will tell how heroic the CFPB actually is.

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