The Consumer Financial Protection Agency (CFPB) just opened the door to possible changes and refinements in its Know Before You Owe rule.  The agency, in a letter addressed trade groups representing principal mortgage origination stakeholders such as the American Bankers Association, Mortgage Bankers Association and credit union trade groups and their members said it has begun drafting a Notice of Proposed Rulemaking (NPRM) on the rule, and hope to open it for comment in late July.

CFPB acknowledged the implementation of the rule, which contains the Truth-in-Lending Disclosures (TRID) requirement has posed many operational challenges, particularly because of the "diversity of participants, from small to large financial institutions, mortgage brokers, real estate brokers, and title companies, through warehouse lenders, investors, due diligence firms, and rating agencies, whose perspectives may vary as to what compliance under the rule requires."

Richard Cordray, CFPB Director, who issued the letter said his agency continues to work hard to understand industry concerns and find effective solutions.  A cross-Bureau team has been meeting weekly to discuss feedback from stakeholders and identify appropriate responses and has near-daily interactions with outside groups to identify issues and questions. 

He also acknowledged that many of those to whom the letter is addressed have requested answers to issues and concerns in writing and while information is available on the Regulatory Implementation webpage the Bureau recognizes that "incorporating some of the Bureau's existing informal guidance, whether provided through webinar, compliance guide, or otherwise, into the regulation text and commentary would be helpful."  There are also places in the regulation text and commentary where adjustments would provide for greater certainty and clarity, he said.

Agency staff would be meeting with representatives from the addressees in late May or early June for further discussions on the Know Before You Owe Rule but Cordray said he hopes to continue receiving feedback in the interim.