CFPB report says disclosure rule has cost lenders

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The Consumer Financial Protection Bureau released a five-year look-back review of its mortgage disclosure rule that found consumers benefited from being able to compare terms and costs but that lenders paid a high price for compliance.

The CFPB released an assessment Thursday of its 2015 rule consolidating requirements from the Truth in Lending Act and Real Estate Settlement Procedures Act into a single disclosure regime. The integrated disclosure, known as TRID, was mandated under the Dodd-Frank Act.

The bureau also issued a 33-page report describing how frequently the information given to consumers on loan estimates and closing disclosure forms changes in the origination process. Nearly 90% of all home loans involved at least one revision to either the loan estimate or closing disclosure form, the CFPB found.

The bureau also found that TRID resulted in “sizeable implementation costs for companies,” totaling roughly $146 per mortgage originated in 2015 and roughly $39 per closing. The effects of TRID on ongoing costs is less clear, the bureau said.

The CFPB was unable to obtain or generate the data necessary to do a cost-benefit analysis of the TRID rule, according to a statement in the report from CFPB Director Kathy Kraninger.

In the review, which examined data on 50,000 mortgages, the bureau found that 62% of home loans received at least one revised loan estimate form while 49% received at least one corrected closing disclosure form. The report found that loan terms varied dramatically. Roughly 40% of all home loans had at least one change to the annual percentage rate, while nearly 25% had changes to the loan amount and loan-to-value ratio. Interest rates changed on 8% of home loans, the report found.

The bureau is accepting public comments to determine whether further changes are needed that would strengthen the rule’s benefits or reduce costs.

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CFPB TRID Mortgages Integrated mortgage disclosures Disclosures
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