On October 14, 2014 the Consumer Financial Protection Bureau (CFPB) issued a proposal to modify the final rule published last November. The proposal touches on two issues.
Revised Loan Estimate After Rate Lock
The proposal gives creditors some extra time to provide consumers with revised Loan Estimates after a consumer locks a floating interest rate. Under current integrated disclosure rules, when consumers lock their interest rates, creditors are required to give them a revised Loan Estimate the same day. The CFPB has determined that such a short turnaround may be challenging for creditors that currently allow consumers to lock interest rates late in the day or after business hours. This could result in creditors only allowing consumers to lock interest rates during business hours or even early in the day (e.g., before noon). The proposal will give creditors until the next business day to provide the revised disclosures.
Construction Loan Disclosure
The proposal also allows a minor addition on the Loan Estimate form. Construction loans often take longer to settle than other loans, and the estimated charges may change during that period. The proposal would create a space on the Loan Estimate form where creditors could include language informing consumers that they may receive a revised Loan Estimate for a construction loan that is expected to take more than 60 days to settle.
Comments must be received by November 10, 2014.
A copy of the proposal is available here.
