[Federal Register Volume 79, Number 7 (Friday, January 10, 2014)]
[Notices]
[Pages 1836-1837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00272]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
Notice of Availability of Certain Revised Consumer Information
Publications
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice of availability.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau or CFPB)
announces the availability of three revised consumer publications,
including a consumer information brochure and two booklets required
under the Real Estate Settlement Procedures Act (RESPA), Regulation X,
the Truth in Lending Act (TILA), and Regulation Z. These publications
are titled: What You Should Know About Home Equity Lines of Credit, the
Consumer Handbook on Adjustable-Rate Mortgages, and the Shopping for
Your Home Loan: Settlement Cost Booklet.
ADDRESSES: The revised consumer publications are available for download
on the Bureau's Web site at www.consumerfinance.gov/learnmore and can
also be found in the Catalog of U.S. Government Publications (http://catalog.gpo.gov), maintained by Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402.
FOR FURTHER INFORMATION CONTACT: Lea Mosena, Legal Division; Susan
Haag, Office of Financial Education; and Richard Arculin, Office of
Regulations, [email protected] or (202) 435-7700.
SUPPLEMENTARY INFORMATION: Pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act), Public Law 111-
203, the CFPB is responsible for three consumer information
publications related to mortgage and home equity line of credit
transactions, titled: (1) What You Should Know About Home Equity Lines
of Credit (HELOC Brochure); (2) Consumer Handbook on Adjustable-Rate
Mortgages (CHARM Booklet); and (3) Shopping for Your Home Loan,
Settlement Cost Booklet (Settlement Cost Booklet). The HELOC Brochure
and CHARM booklet were formerly published by the Board of Governors of
the Federal Reserve System (Board). The Settlement Cost Booklet was
formerly published by the Department of Housing and Urban Development
(HUD).
The CFPB is making technical and conforming changes to each of the
three publications in conjunction with the January 2014 effective dates
for many provisions of the Bureau's rulemakings regulating practices in
mortgage origination and servicing. A description of the changes in
each publication follows.
The Bureau views the publications as part of the Bureau's broader
mission to educate consumers about consumer financial products. The
Bureau intends to revise the publications and develop other educational
materials that will be accessible on its public Web site. The Bureau
therefore expects to consider further revisions to these publications
in the future, in particular to reflect changes to disclosure
requirements for mortgage credit transactions under TILA and for real
estate settlements under RESPA, pursuant to the Bureau's Integrated
Mortgage Disclosures under the Real Estate Settlement Procedures Act
(Regulation X) and the Truth in Lending Act (Regulation Z) final rule
issued on November 20, 2013.
Those who provide these publications may, at their option,
immediately begin using the revised HELOC Brochure, CHARM Booklet, or
Settlement Cost Booklet, or suitable substitutes to comply with the
requirements in Regulations X and Z. The Bureau understands, however,
that some may wish to use their existing stock of publications.
Therefore, those who provide these publications may use earlier
versions of these publications until existing supplies are exhausted.
[[Page 1837]]
When reprinting these publications, the most recent version should be
used.
HELOC Brochure
The Home Equity Loan Consumer Protection Act of 1988, Public Law
100-709, amended TILA to require creditors to give consumers, among
other disclosures, an educational brochure on home-equity plans at the
time an application is provided. Specifically, TILA section 127A
requires that, in addition to certain other disclosures, when a
consumer is applying to open an account under any open-end consumer
credit plan secured by the consumer's principal dwelling, ``the
creditor or other person providing such disclosures to the consumer
shall provide (1) a pamphlet published by the Bureau pursuant to
section 4 of the Home Equity Consumer Protection Act of 1988; or (2)
any pamphlet which provides substantially similar information to the
information described in such section, as determined by the Bureau.''
15 U.S.C. 1637a(e).
Prior to the Dodd-Frank Act, the Board implemented this requirement
in 12 CFR 226.5b(e) and developed and published the HELOC Brochure to
consumers with basic information about the features of a home equity
line of credit and what to look for and compare when shopping for
credit. Under the Dodd-Frank Act, the responsibility for the HELOC
Brochure transferred to the CFPB. Under the CFPB's Regulation Z, at the
time an application for a HELOC is provided to the consumer, a creditor
must provide certain disclosures and ``the home equity brochure
entitled `What You Should Know About Home Equity Lines of Credit' or a
suitable substitute.'' 12 CFR 1026.40(e).
To reflect the transfer to the CFPB and ensure consistency with the
Bureau's rulemakings regulating practices in mortgage origination and
servicing, many of which take effect in January 2014, the CFPB has made
technical and conforming changes to the HELOC Brochure. Specifically,
the revised publication adds a reference to the requirement that
lenders must provide borrowers with a list of housing counselors in
their area, CFPB contact information, and updates to other Federal
agency contact information. It also adds CFPB resources for consumers
including information about how consumers can submit a complaint to the
Bureau, a link to the Bureau's online ``Ask CFPB'' tool to find answers
to questions about mortgages and other financial topics, and a link to
an online tool to find local HUD-approved housing counseling agencies.
CHARM Booklet
In 1987, the Board revised Regulation Z, to require special
disclosures for closed-end ARMs secured by the borrower's principal
dwelling with a term greater than one year. 52 FR 48665 (Dec. 24,
1987). The Board and the Federal Home Loan Bank Board (predecessor to
the former Office of Thrift Supervision (OTS)) developed the CHARM
booklet in 1987 to fulfill that requirement and educate consumers about
the features and risks associated with adjustable-rate mortgages. Under
the Dodd-Frank Act, the responsibility for the CHARM Booklet
transferred to the Bureau. Under 12 CFR 1026.19(b)(1), the ``booklet
titled Consumer Handbook on Adjustable Rate Mortgages, or a suitable
substitute'' must generally be given to consumers at the time an
application for an adjustable-rate mortgage is provided or before the
consumer pays a non-refundable fee, whichever is earlier.
To reflect the transfer to the CFPB and ensure consistency with the
Bureau's rulemakings regulating practices in mortgage origination and
servicing that take effect in January 2014, the CFPB has made technical
and conforming changes to the CHARM Booklet. The key revisions to the
CHARM booklet include: (1) Removing references to certain fees and
product types that are no longer permitted, such as prepayment
penalties on adjustable-rate mortgages; (2) adding information about
the lender's obligation to consider the borrower's ability to repay the
loan, provide disclosure of interest rate adjustments, and ensure a
borrower has received homeownership counseling before making a negative
amortization loan; and (3) adding CFPB contact information and
resources for consumers and updates to other federal agency contact
information. The CFPB resources added include: information about how
consumers can submit a complaint to the Bureau; a link to the Bureau's
online ``Ask CFPB'' tool to find answers to questions about mortgages
and other financial topics; and a link to an online tool to find local
HUD-approved housing counseling agencies.
Settlement Cost Booklet/Special Information Booklet
In its enactment in 1974, RESPA required the provision of ``special
information booklets'' to help persons borrowing money to finance the
purchase of residential real estate to understand better the nature and
costs of real estate settlement services. Public Law 93-553. Since
1976, HUD implemented this requirement by publishing the Settlement
Cost Booklet.
The Dodd-Frank Act amended RESPA, among other things, to transfer
to the Bureau the responsibility for ``a booklet to help consumers
applying for federally related mortgage loans to understand the nature
and costs of real estate settlement services.'' 12 U.S.C. 2604. Under
12 CFR 1024.6, lenders are directed to provide a copy of the special
information booklet to each person who has submitted a written
application for certain federally related mortgage loans within 3
business days after receiving the application. To reflect the transfer
to the CFPB and ensure consistency with the Bureau's rulemakings
regulating practices in mortgage origination and servicing that take
effect in January 2014, the CFPB has made technical and conforming
changes to the Settlement Cost Booklet. Specifically, the CFPB has
revised the booklet to add information about new servicing protections
for consumers, including servicer obligations to (1) respond promptly
to consumer requests for information and notices of errors, (2) provide
mortgage payoff statements and monthly billing information, and (3)
contact delinquent consumers regarding options to avoid foreclosure. As
with the HELOC Brochure and CHARM Booklet, the revised Settlement Cost
Booklet also adds CFPB contact information and resources for consumers,
and updates other federal agency contact information. The CFPB
resources added include: information about how consumers can submit a
complaint to the Bureau; a link to the Bureau's online ``Ask CFPB''
tool to find answers to questions about mortgages and other financial
topics; and a link to an online tool to find local HUD-approved housing
counseling agencies. These changes obviate the relevance of the
permissible chang.es stated in 12 CFR 1024.6(d)(1)(ii) and the last
sentence of 12 CFR 1024.6(d)(2) for those using the revised Settlement
Cost Booklet.
The CFPB is hereby publishing this notice of availability regarding
the revised HELOC Brochure, CHARM Booklet, and Settlement Cost Booklet
to provide appropriate notice of the revisions.
Dated: January 6, 2014.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2014-00272 Filed 1-9-14; 8:45 am]
BILLING CODE 4810-AM-P