WASHINGTON — The Consumer Financial Protection Bureau is seeking public input on potential changes to federal mortgage lending regulations that it said could reduce compliance burdens, lower borrowing costs and expand access to mortgage credit, particularly through revisions to long-standing disclosure and rescission requirements.
In a request for information, the CFPB said it is evaluating possible revisions to mortgage disclosure requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act, known collectively as TRID, as well as the three-day right of rescission for certain mortgage refinancing transactions and disclosure requirements for reverse mortgages.
The bureau said the review is consistent with President Donald Trump’s Executive Order 14393, issued in March, which directs federal agencies to consider regulatory changes intended to improve the availability and affordability of mortgage credit, reduce origination costs and encourage greater participation in mortgage lending by community banks.
What’s Being Sought
According to the CFPB, the agency is seeking information on whether existing regulations have become unnecessarily burdensome while continuing to meet consumer protection objectives. Comments will be accepted for 30 days following publication of the notice in the Federal Register.
Among the issues on which the bureau is requesting feedback are:
- Whether current timing requirements for Loan Estimates, Closing Disclosures and the three-day rescission period delay mortgage closings or restrict access to credit.
- Whether disclosure timing rules could be replaced or supplemented with materiality-based standards that preserve consumer protections while reducing delays.
- Whether existing fee tolerance requirements under the TRID rule should be modified.
- Whether additional guidance is needed regarding electronic disclosures and digital signatures.
- Whether disclosure requirements for construction loans and reverse mortgages should be updated or simplified.
Additional Request
The CFPB also asked whether the combination of the three-business-day waiting period before closing and the three-business-day rescission period after closing for many refinancing transactions unnecessarily delays loan funding and whether those requirements should be revised.
The Bureau is specifically requesting data on the costs and benefits of existing disclosure requirements, including whether they increase expenses for lenders, mortgage brokers or consumers and whether those costs are justified by consumer protection benefits. It also asked whether current disclosure forms could be modified to improve consumer understanding while streamlining the mortgage origination process.
Earlier Amendments to TRID
The CFPB noted that the TRID disclosure framework, first adopted in 2013 under the Dodd-Frank Act, has been amended several times and was the subject of a formal assessment in 2020 following an earlier request for public input. The agency said comments submitted in response to the new request for information should include supporting data where possible to assist in evaluating potential regulatory changes.
