CFPB Extends Comment Period for Proposed Change to Finance Charge Definition

Written by Steve Van Beek

On Friday afternoon, the CFPB extended the comment period for the proposed change to the finance charge definition.  Initially, the comment period was scheduled to close on Friday, September 7th.  The extension will now allow public comments until November 6, 2012.  

The proposed change was part of the TILA/RESPA proposal and would also impact the HOEPA proposed rule (as the move to an all-in APR would impact the number of mortgage loans covered by HOEPA).  The CFPB's notice includes formal extensions for both the TILA/RESPA proposal and the HOEPA proposal.  

Of note, the extension to November 6th aligns the finance charge comment period with the rest of the TILA/RESPA proposed rule - where comments are due for the full proposal by November 6th.  However, the HOEPA proposal - except for the finance charge proposed change - will still have a comment deadline of Friday, September 7th.  From the notice:

"The comment period for whether and how to account for the implications of a more inclusive finance charge on the scope of HOEPA coverage, see proposed § 1026.32(a)(l)(i) and (b)(1)(i), is extended to November 6, 2012.  The comment period for all other proposed amendments in that notice, which ends on September 7, 2012, is unchanged."

NAFCU Regulatory Alerts.  NAFCU members can view our Regulatory Alerts on the TILA/RESPA proposal (which includes a separate Alert for the finance charge change), the HOEPA proposal and mortgage servicing proposed rules.

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NAFCU Webcast on Mortgage Proposals.  Don't forget, I'll be doing a special 3-hour webcast tomorrow on the CFPB's mortgage proposals.  The presentation will focus heavily on the CFPB's mortgage servicing proposals (both the TILA and RESPA proposed changes) as well as the HOEPA changes.  I'll also overview the TILA/RESPA rule - including a detailed discussion of the proposed change to the finance charge and how this change could impact credit unions (especially with relation to bringing more loans under the HOEPA protections).  

Additionally, I've done my best to highlight future headache areas.  I'm sure there will be plenty of additional issues that will arise but I've tried to organize the webcast to put these topics "on your radar."  Remember, the CFPB must finalize the mortgage servicing proposals and the HOEPA proposal by January 21, 2013. 

Comments

[Joan Whittaker]

I have several concerns about the rule change:
1. Who is going to enforce the three day rule and how?
2. There was no place on the proposed for for the sellers' signatures.
3. It appears that this will put smaller title companies out of business as banks can just create their own closing departments. Not a good idea at a time when we need to create more jobs - especially in the floundering real estate related industries.
4. Software companies will have to revise their closing programs at a significant cost - which they will probably pass on to their users increasing costs for everyone.
5. This change will be even more confusing to consumers than the current GFE is.
6. Sellers' do not need to know the terms of a buyers' financing.

[Steve Van Beek]

Joan,
Very good comments. The silver lining is that comments like yours should help inform the CFPB prior to their issuance of final rules. Hopefully the comments have a meaningful impact. Thanks again for the comments.