Consumer Financial Protection Bureau Targets Red Tape In Mortgage Process
WASHINGTON – The new Consumer Financial Protection Bureau will take aim at the huge paperwork requirements in the mortgage process as its first project, with a new try at combining disclosures for the Truth In Lending Act and the Real Estate Settlement Procedures Act, according to Elizabeth Warren, the White House advisor who is organizing the consumer agency.
Warren told more than 4,000 attendees at CUNA’s Government Affairs Conference that cutting red tape around the TILA and RESPA has been an ongoing government project for 20 years but has always been stymied because of the two agencies, the Federal Reserve and the Department of Housing and Urban Development, that oversee the two disclosures. “Each agency says, ‘go ahead and do it, as long as it’s on our form,’” Warren said at GAC. But the advent of a single agency overseeing the consumer process now should facilitate action. “At least those turf battles will be gone,” she said.
She said she hopes to reduce those disclosures from more than 30 pages to a one-page shopping sheet that consumers can use to comparison shop real estate products.
The next item on the priority list, said Warren, is to ensure that all financial service providers follow the same rules, noting that her agency will be the first to regulate 80,000 non-bank and non-credit union financial service providers, including check cashers, payday lenders and mortgage brokers.
Warren, who created the idea of a consumer protection agency, continued her efforts to court various Washington lobby groups as she retains hopes of being formally named director of the new agency. She said she has set up a liaison office in the new bureau for credit unions and community banks, with whom she has been working closely. “We plan to have an ongoing conversation with small banks and credit unions,” she said.
Still, some Republicans maintain their opposition to Warren, who they fear will add to regulatory burden for financial institutions, something that credit unions worry about too. Many conservative Republicans are skeptical about the powerful new financial regulator and remain disgruntled over President Barack Obama’s September decision to appoint Warren as a key architect of the bureau, a move that allowed Warren to bypass what would have likely been a tough Senate confirmation battle.