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CFPB extends Truth-in-Lending start date

11.19.2012

The Truth-in-Lending Act requires financial institutions to outline specific costs of taking on a mortgage.

In an effort to make the mortgage industry a safer place for borrowers, during recent years, a number of government agencies implemented new rules and regulations for financial institutions.

The Consumer Financial Protection Bureau is one such agency that has been a trailblazer to regulate the sector and ensure borrowers get all the information they need prior to taking on a mortgage.

Specific regulations are outlined under the Dodd-Frank new Truth-in-Lending Act. This initiative will require financial institutions to provide outlined information to potential borrowers regarding their home loans. Everything from projected monthly payments to information on how to cancel escrow accounts will be included.

Initially, lenders had until January 21, 2013 to adhere to the Truth-in-Lending Act, but the CFPB recently announced it would push back the start date to the latter half of 2013. The agency claims it needs more time to finalize key regulations that could make the mortgage industry a safer place for borrowers.   

"Considering these disclosures on the same timeline will ensure that consumers receive clear, concise, and consistent information," said CFPB director Richard Cordray. "By seeking public comment and conducting consumer-testing for these disclosures together, we can avoid the duplication and inefficiency that existed in the past."

By taking more time to hear feedback about proposed regulations, the CFPB will be able to better create regulations for the mortgage industry, which could further ensure the success of borrowers in their pursuit of homeownership and refinancing.

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