The American Bankers Association is urging the Federal Reserve Board to drydock a major Truth in Lending Act proposal because it pre-dates passage of the Dodd-Frank Act and no longer fits into the mortgage regulatory scheme mandated by the legislation.
DFA mandates the merger of TILA and Real Estate Settlement Procedure Act mortgage disclosures, which should become a priority and require the coordination of all regulators, including the new Consumer Financial Protection Bureau, according to an ABA comment letter.
"To achieve this objective, ABA believes that the federal banking agencies must work with those organizing the Bureau to develop a comprehensive plan for disclosure reform that includes an agenda and timetable to propose, finalize and implement all mortgage disclosure revisions by the Board or the Bureau and the other agencies in an orderly manner," ABA executive vice president Bob Davis says in the letter.
The Fed's proposed rule, which grew out of a 2004 TILA review, has already drawn the ire of consumer groups who claim the wide-ranging proposal will "eviscerate" borrowers' rights to rescind abusive mortgages or stop foreclosures.
The TILA proposal also creates new mortgage disclosures for forward and reverse mortgages and establishes new indices for high-cost loans.
ABA wants the Fed to defer action to ensure new regulations "complement the RESPA-TILA integration effort and do not merely add undue burden and confusion."
