Softening Truth in Lending and Real Estate Settlement Rules is a Roadmap for Abuse
WASHINGTON – With the Consumer Financial Protection Bureau (CFPB) signaling that it will unravel important protections for people taking out mortgages, the National Consumer Law Center (NCLC), National Housing Law Project, National Fair Housing Alliance, Americans for Financial Reform Education Fund, and Consumer Federation of America submitted comments warning that the plan would open the door for disreputable lenders to prey on consumers and saddle them with risky loans.
The CFPB is taking aim at rules the agency developed decades ago to help borrowers get access to more affordable credit. The actions affect the Truth and Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), which together form the TILA-RESPA Integrated Disclosure (TRID) rules. The CFPB developed the current TRID regime through extensive notice and comment rulemaking, and the mortgage industry has gone to considerable expense to implement it.
“Instead of weakening regulations, we urge the CFPB to enforce the existing TRID regulations,” said Steve Sharpe, senior attorney at NCLC. “Any changes must serve the ultimate goal of helping borrowers access safe and affordable credit.”
TILA and RESPA are designed to help people understand the confusing and expensive process of getting a loan. Both laws, their regulations, and TRID, were adopted after years of evidence showing lenders and other parties to the loan origination process were taking advantage of the complexity of the process to stick consumers with unfair charges and inflated prices. Eliminating these rules would reduce access to affordable credit.
The comments urged the CFPB to review the obligations of the statute, especially around the “rules of rescission,” which give borrowers a three-day window to cancel a mortgage without penalty. This vital protection allows borrowers to evaluate a lenders’ final offer. That’s an essential provision, especially if borrowers were pressured to complete the origination process and would be trapped in an unaffordable loan because of lender misconduct.
“Mortgage transactions are too complex to digest at the closing table, at the last minute,” said Andrew Pizor, senior attorney at NCLC. “The pre-consummation disclosures and the right of rescission complement each other. Consumers deserve to see the final loan terms before closing, and they need a chance to cancel if they have been pressured into signing. A family’s home is too important to take away these protections.”
Borrower protections are especially important in reverse mortgage transactions, which are particularly complex. The borrower must select from various products that offer different loan terms and payment scenarios. The groups urged the CFPB to improve reverse mortgage disclosures through consumer testing and extensive public feedback.
The groups provided suggestions for the CFPB to make disclosures easier to understand and help creditors offer more affordable loans, including: creating “responsive-design” electronic disclosures for different sized devices; allowing creditors to use a streamlined disclosure form when including all closing costs in the interest rate; and developing borrower-friendly disclosures and mandatory pre-loan counseling for reverse mortgages.
“Disclosure is not enough,” said Pizor. “Given the complexity of reverse mortgages, pre-loan counseling is necessary to ensure that consumers are aware of the risks and can weigh their options.”
Related Resources
- Press Release: Trump Seeks to Strip Mortgage Rules Created to Prevent Another Financial Crisis, Mar. 16, 2026
- Issue Brief: Homeowners at Risk: Nationwide Survey Reveals Critical Gaps the CFPB Must Address to Prevent Foreclosures, Feb. 21, 2024
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