64336 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Proposed Rules 

1 78 FR 79730 (Dec. 31, 2013). 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Parts 1024 and 1026 

[Docket No. CFPB–2014–0028] 

RIN 3170–AA48 

Amendments to the 2013 Integrated 

Mortgage Disclosures Rule Under the 

Real Estate Settlement Procedures Act 

(Regulation X) and Truth In Lending 

Act (Regulation Z) and the 2013 Loan 

Originator Rule Under the Truth in 

Lending Act (Regulation Z) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Proposed rule with request for 

public comment. 

SUMMARY: The Bureau is proposing two 

modifications to the Truth in Lending 

Act and Real Estate Settlement 

Procedures Act Final Rule (TILA– 

RESPA Final Rule): An adjustment to 

the timing requirement for revised 

disclosures when the consumer locks a 

rate or extends a rate lock after the 

initial disclosures are provided; and an 

amendment to permit language related 

to new construction loans to be 

included on the Loan Estimate form. 

The Bureau also is proposing to amend 

the 2013 Loan Originator Final Rule to 

provide for placement of the 

Nationwide Mortgage Licensing System 

and Registry ID (NMLSR ID) on the 

integrated disclosures. Additionally, the 

Bureau is proposing technical 

corrections, including citation and 

cross-reference updates, and wording 

changes for clarification purposes to 

various provisions of Regulations X and 

Z as amended or adopted by the TILA– 

RESPA Final Rule. 

DATES: Comments must be received on 

or before November 10, 2014. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2014– 

0028 or RIN 3170–AA48, by any of the 

following methods: 

• Electronic: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Consumer Financial 

Protection Bureau, 1700 G Street NW., 

Washington, DC 20552. 

• Hand Delivery/Courier: Monica 

Jackson, Office of the Executive 

Secretary, Consumer Financial 

Protection Bureau, 1275 First Street NE., 

Washington, DC 20002. 

Instructions: All submissions should 

include the agency name and docket 

number or Regulatory Information 

Number (RIN) for this rulemaking. 

Because paper mail in the Washington, 

DC area and at the Bureau is subject to 

delay, commenters are encouraged to 

submit comments electronically. In 

general, all comments received will be 

posted without change to http://

www.regulations.gov. In addition, 

comments will be available for public 

inspection and copying at 1275 First 

Street NE., Washington, DC 20002, on 

official business days between the hours 

of 10 a.m. and 5 p.m. Eastern Time. You 

can make an appointment to inspect the 

documents by telephoning (202) 435– 

7275. 

All comments, including attachments 

and other supporting materials, will 

become part of the public record and 

subject to public disclosure. Sensitive 

personal information, such as account 

numbers or social security numbers, 

should not be included. Comments 

generally will not be edited to remove 

any identifying or contact information. 

FOR FURTHER INFORMATION CONTACT: 

Jaydee DiGiovanni, Policy and 

Procedure Analyst; Richard Arculin and 

David Friend, Counsels; Office of 

Regulations, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Summary of the Proposed Rule 

In November 2013, pursuant to 

sections 1098 and 1100A of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), the 

Bureau issued the Integrated Mortgage 

Disclosures under the Real Estate 

Settlement Procedures Act (Regulation 

X) and Truth in Lending Act (Regulation 

Z) (TILA–RESPA Final Rule),1

combining certain disclosures that 

consumers receive in connection with 

applying for and closing on a mortgage 

loan. 

This rule proposes two amendments 

to Regulation Z provisions adopted by 

the 2013 TILA–RESPA Final Rule. First, 

the Bureau is proposing to amend 

§ 1026.19(e)(3)(iv)(D), which states that, 

in order to revise the estimated amounts 

used to determine good faith pursuant 

to § 1026.19(e)(1), creditors must 

redisclose interest rate dependent 

charges and loan terms on the date that 

the rate is locked. The Bureau is 

proposing to relax the timing 

requirement to state that creditors must 

provide a revised disclosure no later 

than the next business day after the date 

the rate is locked, instead of the same 

date. Second, the Bureau is proposing to 

amend § 1026.37(m) to provide for the 

placement of language relating to certain 

new construction loans on the Loan 

Estimate form that is required in order 

for creditors to redisclose estimated 

charges. 

The Bureau also is proposing several 

corrections, updates, and wording 

changes for clarification purposes that 

are non-substantive in nature, such as 

(1) technical corrections and corrected 

or updated citations and crossreferences in the regulatory text and 

commentary adopted by the TILA– 

RESPA Final Rule; (2) minor wording 

changes throughout regulatory 

provisions and commentary adopted by 

the TILA–RESPA Final Rule for 

additional clarity; and (3) an 

amendment to § 1026.36(g)(2)(ii), 

adopted by the 2013 Loan Originator 

Final Rule, to provide for placement of 

the NMLSR ID on the integrated 

disclosures. 

The Bureau is seeking comment on 

these amendments, with a 30-day 

comment period from the date of 

issuance of this proposed rule. The 

Bureau intends to finalize these 

proposed amendments quickly in order 

to provide industry adequate time to 

implement any changes that result from 

this proposal by the August 1, 2015 

effective date. 

II. Background 

A. The Integrated Disclosures 

Rulemaking 

In July 2010, the Dodd-Frank Act was 

enacted by Congress, which transferred 

rulemaking authority under both TILA 

and RESPA to the Bureau and, under 

sections 1032(f), 1098, and 1100A, 

mandated that the Bureau establish a 

single disclosure scheme under TILA 

and RESPA and propose for public 

comment rules and model disclosures 

that integrate the TILA and RESPA 

disclosures by July 21, 2012. 12 U.S.C. 

2603(a), 5532(f); 15 U.S.C. 1604(b). In 

addition, the Dodd-Frank Act amended 

both statutes to mandate that the Bureau 

establish a single disclosure scheme for 

use by lenders or creditors in complying 

comprehensively with the disclosure 

requirements discussed above. Section 

1098(2) of the Dodd-Frank Act amended 

RESPA section 4(a) to require that the 

Bureau publish a single, integrated 

disclosure for mortgage loan 

transactions ‘‘which includes the 

disclosure requirements of this section 

and section 5, in conjunction with the 

disclosure requirements of [TILA] that, 

taken together, may apply to a 

transaction that is subject to both or 

either provisions of law.’’ 12 U.S.C. 

2603(a). Similarly, section 1100A(5) of 

the Dodd-Frank Act amended TILA 

section 105(b) to require that the Bureau 

publish a single, integrated disclosure 

for mortgage loan transactions which 

‘‘includes the disclosure requirements 

of this title in conjunction with the 


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Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Proposed Rules 64337 

2The amendments to RESPA and TILA 

mandating a ‘‘single, integrated disclosure’’ are 

among numerous conforming amendments to 

existing Federal laws found in subtitle H of the 

Consumer Financial Protection Act of 2010. Subtitle 

C of the Consumer Financial Protection Act, 

‘‘Specific Bureau Authorities,’’ codified at 12 U.S.C. 

chapter 53, subchapter V, part C, contains a similar 

provision. Specifically, section 1032(f) of the DoddFrank Act provides that, by July 21, 2012, the 

Bureau ‘‘shall propose for public comment rules 

and model disclosures that combine the disclosures 

required under [TILA] and sections 4 and 5 of 

[RESPA] into a single, integrated disclosure for 

mortgage loan transactions covered by those laws, 

unless the Bureau determines that any proposal 

issued by the [Board] and [HUD] carries out the 

same purpose.’’ 12 U.S.C. 5532(f). The Bureau 

issued the TILA–RESPA Proposal pursuant to that 

mandate and the parallel mandates established by 

the conforming amendments to RESPA and TILA, 

discussed above. 

3See the Bureau’s press release Consumer 

Financial Protection Bureau proposes ‘‘Know Before 

You Owe’’ mortgage forms (July 9, 2012), available 

at http://www.consumerfinance.gov/pressreleases/

consumer-financial-protection-bureau-proposesknow-before-you-owe-mortgage-forms/; the Bureau’s 

blog post Know Before You Owe: Introducing our 

proposed mortgage disclosure forms (July 9, 2012), 

available at http://www.consumerfinance.gov/blog/

know-before-you-owe-introducing-our-proposedmortgage-disclosure-forms/. 

4Public Law 111–203, 124 Stat. 1376, section 

1061(b)(7); 12 U.S.C. 5581(b)(7). 

5 12 U.S.C. 5581(a)(1). 

6 Dodd-Frank Act section 1002(14), 12 U.S.C. 

5481(14) (defining ‘‘Federal consumer financial 

law’’ to include the ‘‘enumerated consumer laws’’ 

and the provisions of title X of the Dodd-Frank Act); 

Dodd-Frank Act section 1002(12), 12 U.S.C. 

5481(12) (defining ‘‘enumerated consumer laws’’ to 

include TILA and RESPA); Dodd-Frank section 

1400(b), 15 U.S.C. 1601 note (defining ‘‘enumerated 

consumer laws’’ to include certain subtitles and 

provisions of Title XIV). 

7Section 1100A of the Dodd-Frank Act amended 

TILA section 105(b) to provide that the ‘‘Bureau 

shall publish a single, integrated disclosure for 

mortgage loan transactions (including real estate 

settlement cost statements) which includes the 

disclosure requirements of this title in conjunction 

with the disclosure requirements of the Real Estate 

Settlement Procedures Act of 1974 that, taken 

together, may apply to a transaction that is subject 

to both or either provisions of law.’’ 15 U.S.C. 

1604(b). Section 1098 of the Dodd-Frank amended 

RESPA section 4(a) to require the Bureau to publish 

a ‘‘single, integrated disclosure for mortgage loan 

transactions (including real estate settlement cost 

statements) which includes the disclosure 

requirements of this section and section 5, in 

conjunction with the disclosure requirements of the 

Truth in Lending Act that, taken together, may 

apply to a transaction that is subject to both or 

either provisions of law.’’ 12 U.S.C. 2603(a). 

8This requirement applies to extensions of credit 

that are both secured by a dwelling and subject to 

RESPA. TILA section 128(b)(2)(A); 15 U.S.C. 

1638(b)(2)(A). 

disclosure requirements of [RESPA] 

that, taken together, may apply to a 

transaction that is subject to both or 

either provisions of law.’’ 15 U.S.C. 

1604(b).2

The Bureau issued proposed 

integrated disclosure forms and rules for 

public comment on July 9, 2012 (the 

TILA–RESPA Proposal or proposal).3

On December 31, 2013, more than 17 

years after Congress first directed the 

Board and HUD to integrate the 

disclosures under TILA and RESPA, the 

Bureau published the TILA–RESPA 

Final Rule. 

B. Implementation Support 

In early 2014, the Bureau initiated 

efforts to support industry 

implementation of the TILA–RESPA 

Integrated Disclosure Final Rule. These 

efforts include: (1) The publication of a 

plain-language compliance guide and 

guide to forms to help industry 

understand the new rules, including 

updates to the guides, as needed; (2) an 

ongoing series of webinars to address 

common interpretive questions; (3) 

roundtables with industry, including 

creditors, settlement service providers, 

and vendors, to discuss implementation; 

(4) participation in conferences and 

forums; and (5) close collaboration with 

other regulators, including state 

regulators, on implementation of the 

Final Rule, including coordination on 

consistent examination procedures. 

More information regarding the 

Bureau’s TILA–RESPA implementation 

initiative can be found on the Bureau’s 

regulatory implementation Web site at 

www.consumerfinance.gov/regulatoryimplementation. 

As part of the initiative to support 

ongoing implementation efforts, the 

Bureau has conducted extensive 

outreach to multiple stakeholders since 

publication of the Final Rule. Based on 

that extensive outreach, the Bureau 

believes these proposed amendments to 

be relatively straightforward and mostly 

technical in nature. Accordingly, the 

Bureau expects to be able to finalize this 

proposal in sufficient time for creditors 

and other stakeholders to be able to 

implement the final changes prior to the 

August 1, 2015 effective date. 

III. Legal Authority 

The Bureau is issuing this proposed 

rule pursuant to its authority under 

TILA, RESPA, and the Dodd-Frank Act. 

Section 1061 of the Dodd-Frank Act 

transferred to the Bureau the ‘‘consumer 

financial protection functions’’ 

previously vested in certain other 

Federal agencies, including the Board’s 

consumer protection functions relating 

to TILA mortgage disclosures and the 

HUD Secretary’s consumer protection 

functions relating to RESPA.4 The term 

‘‘consumer financial protection 

function’’ is defined to include ‘‘all 

authority to prescribe rules or issue 

orders or guidelines pursuant to any 

Federal consumer financial law, 

including performing appropriate 

functions to promulgate and review 

such rules, orders, and guidelines.’’ 5

Title X of the Dodd-Frank Act, 

including section 1061 of the DoddFrank Act, along with TILA, RESPA, 

and certain subtitles and provisions of 

title XIV of the Dodd-Frank Act, are 

Federal consumer financial laws.6

Accordingly, the Bureau has authority 

to issue regulations pursuant to TILA 

and RESPA, including the disclosure 

requirements added to those statutes by 

title XIV of the Dodd-Frank Act, as well 

as title X of the Dodd-Frank Act. 

A. The Integrated Disclosure Mandate 

Section 1032(f) of the Dodd-Frank Act 

requires that, ‘‘[n]ot later than one year 

after the designated transfer date [of July 

21, 2011], the Bureau shall propose for 

public comment rules and model 

disclosures that combine the disclosures 

required under [TILA] and sections 4 

and 5 of [RESPA], into a single, 

integrated disclosure for mortgage loan 

transactions covered by those laws, 

unless the Bureau determines that any 

proposal issued by the [Board] and 

[HUD] carries out the same purpose.’’ 12 

U.S.C. 5532(f). In addition, the DoddFrank Act amended section 105(b) of 

TILA and section 4(a) of RESPA to 

require the integration of the TILA 

disclosures and the disclosures required 

by sections 4 and 5 of RESPA.7 The 

purpose of the integrated disclosure is 

to facilitate compliance with the 

disclosure requirements of TILA and 

RESPA and to help the borrower 

understand the transaction by utilizing 

readily understandable language to 

simplify the technical nature of the 

disclosures. Dodd-Frank Act sections 

1098, 1100A. 

Although Congress imposed this 

integrated disclosure requirement, it did 

not harmonize the underlying statutes. 

In particular, TILA and RESPA establish 

different timing requirements for 

disclosing mortgage credit terms and 

costs to consumers and require that 

those disclosures be provided by 

different parties. TILA generally 

requires that, within three business days 

of receiving the consumer’s application 

and at least seven business days before 

consummation of certain mortgage 

transactions, creditors must provide 

consumers a good faith estimate of the 

costs of credit.8 TILA section 

128(b)(2)(A); 15 U.S.C. 1638(b)(2)(A). If 

the annual percentage rate that was 

initially disclosed becomes inaccurate, 

TILA requires creditors to redisclose the 

information at least three business days 

before consummation. TILA section 

128(b)(2)(D); 15 U.S.C. 1638(b)(2)(D). 

These disclosures must be provided in 

final form at consummation. TILA 


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9 15 U.S.C. 1639. TILA section 129 contains 

requirements for certain high-cost mortgages, 

established by the Home Ownership and Equity 

Protection Act (HOEPA), which are commonly 

called HOEPA loans. 

section 128(b)(2)(B)(ii); 15 U.S.C. 

1638(b)(2)(B)(ii). RESPA also requires 

that the creditor or broker provide 

consumers with a good faith estimate of 

settlement charges no later than three 

business days after receiving the 

consumer’s application. However, 

unlike TILA, RESPA requires that, at or 

before settlement, ‘‘the person 

conducting the settlement’’ (which may 

or may not be the creditor) provide the 

consumer with a statement that records 

all charges imposed upon the consumer 

in connection with the settlement. 

RESPA sections 4(b), 5(c); 12 U.S.C. 

2603(b), 2604(c). 

The Dodd-Frank Act did not reconcile 

these and other statutory differences. 

Therefore, to meet the Dodd-Frank Act’s 

express requirement to integrate the 

disclosures required by TILA and 

RESPA, the Bureau was required to do 

so. Dodd-Frank Act section 1032(f), 

TILA section 105(b), and RESPA section 

4(a) provide the Bureau with authority 

to issue regulations that reconcile 

certain provisions of TILA and RESPA 

to carry out Congress’ mandate to 

integrate the statutory disclosure 

requirements. 

B. Other Rulemaking and Exception 

Authorities 

This proposed rule also relies on the 

rulemaking and exception authorities 

specifically granted to the Bureau by 

TILA, RESPA, and the Dodd-Frank Act, 

including the authorities discussed 

below. 

Truth in Lending Act 

TILA section 105(a). As amended by 

the Dodd-Frank Act, TILA section 

105(a), 15 U.S.C. 1604(a), directs the 

Bureau to prescribe regulations to carry 

out the purposes of TILA and provides 

that such regulations may contain 

additional requirements, classifications, 

differentiations, or other provisions and 

may further provide for such 

adjustments and exceptions for all or 

any class of transactions that the Bureau 

judges are necessary or proper to 

effectuate the purposes of TILA, to 

prevent circumvention or evasion 

thereof, or to facilitate compliance 

therewith. A purpose of TILA is ‘‘to 

assure a meaningful disclosure of credit 

terms so that the consumer will be able 

to compare more readily the various 

credit terms available to him and avoid 

the uninformed use of credit.’’ TILA 

section 102(a); 15 U.S.C. 1601(a). This 

stated purpose is informed by Congress’ 

finding that ‘‘economic stabilization 

would be enhanced and the competition 

among the various financial institutions 

and other firms engaged in the 

extension of consumer credit would be 

strengthened by the informed use of 

credit[.]’’ TILA section 102(a). Thus, 

strengthened competition among 

financial institutions is a goal of TILA, 

achieved through the effectuation of 

TILA’s purposes. 

Historically, TILA section 105(a) has 

served as a broad source of authority for 

rules that promote the informed use of 

credit through required disclosures and 

substantive regulation of certain 

practices. Dodd-Frank Act section 

1100A clarified the Bureau’s section 

105(a) authority by amending that 

section to provide express authority to 

prescribe regulations that contain 

‘‘additional requirements’’ that the 

Bureau finds are necessary or proper to 

effectuate the purposes of TILA, to 

prevent circumvention or evasion 

thereof, or to facilitate compliance. This 

amendment clarified the Bureau’s 

authority to exercise TILA section 

105(a) to prescribe requirements beyond 

those specifically listed in the statute 

that meet the standards outlined in 

section 105(a). The Dodd-Frank Act also 

clarified the Bureau’s rulemaking 

authority over certain high-cost 

mortgages pursuant to section 105(a). As 

amended by the Dodd-Frank Act, TILA 

section 105(a) authority to make 

adjustments and exceptions to the 

requirements of TILA applies to all 

transactions subject to TILA, except 

with respect to the provisions of TILA 

section 129 9 that apply to the high-cost 

mortgages referred to in TILA section 

103(bb), 15 U.S.C. 1602(bb). 

TILA section 129B(e). Dodd-Frank Act 

section 1405(a) amended TILA to add 

new section 129B(e), 15 U.S.C. 

1639B(e). That section authorizes the 

Bureau to ‘‘prohibit or condition terms, 

acts, or practices relating to residential 

mortgage loans that the Bureau finds to 

be abusive, unfair, deceptive, predatory, 

necessary, or proper to ensure that 

responsible, affordable mortgage credit 

remains available to consumers in a 

manner consistent with the purposes of 

this section and section 129C [of TILA], 

necessary or proper to effectuate the 

purposes of this section and section 

129C [of TILA], to prevent 

circumvention or evasion thereof, or to 

facilitate compliance with such 

sections, or are not in the interest of the 

borrower.’’ In developing rules under 

TILA section 129B(e), the Bureau has 

considered whether the rules are in the 

interest of the borrower, as required by 

the statute. 

Real Estate Settlement Procedures Act 

Section 19(a) of RESPA, 12 U.S.C. 

2617(a), authorizes the Bureau to 

prescribe such rules and regulations and 

to make such interpretations and grant 

such reasonable exemptions for classes 

of transactions as may be necessary to 

achieve the purposes of RESPA. One 

purpose of RESPA is to effect certain 

changes in the settlement process for 

residential real estate that will result in 

more effective advance disclosure to 

home buyers and sellers of settlement 

costs. RESPA section 2(b); 12 U.S.C. 

2601(b). In addition, in enacting RESPA, 

Congress found that consumers are 

entitled to be ‘‘provided with greater 

and more timely information on the 

nature and costs of the settlement 

process and [to be] protected from 

unnecessarily high settlement charges 

caused by certain abusive practices in 

some areas of the country.’’ RESPA 

section 2(a); 12 U.S.C. 2601(a). In the 

past, RESPA section 19(a) has served as 

a broad source of authority to prescribe 

disclosures and substantive 

requirements to carry out the purposes 

of RESPA. 

In developing rules under RESPA 

section 19(a), the Bureau has considered 

the purposes of RESPA, including to 

effect certain changes in the settlement 

process that will result in more effective 

advance disclosure of settlement costs. 

Dodd-Frank Act 

Dodd-Frank Act section 1021. Section 

1021(a) of the Dodd-Frank Act provides 

that the Bureau shall seek to implement 

and, where applicable, enforce Federal 

consumer financial law consistently for 

the purpose of ensuring that all 

consumers have access to markets for 

consumer financial services and that 

markets for consumer financial products 

and services are fair, transparent, and 

competitive. 12 U.S.C. 5511(a). In 

addition, section 1021(b) of the DoddFrank Act provides that the Bureau is 

authorized to exercise its authorities 

under Federal consumer financial law 

for the purposes of ensuring that, among 

other things, with respect to consumer 

financial products and services: (1) 

Consumers are provided with timely 

and understandable information to 

make responsible decisions about 

financial transactions; (2) consumers are 

protected from unfair, deceptive, or 

abusive acts and practices and from 

discrimination; (3) outdated, 

unnecessary, or unduly burdensome 

regulations are regularly identified and 

addressed in order to reduce 

unwarranted regulatory burdens; (4) 

Federal consumer financial law is 

enforced consistently, without regard to 


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10 78 FR 79730, 79833 (December 31, 2013). 

the status of a person as a depository 

institution, in order to promote fair 

competition; and (5) markets for 

consumer financial products and 

services operate transparently and 

efficiently to facilitate access and 

innovation. 12 U.S.C. 5511(b). 

Accordingly, in developing this 

rulemaking, the Bureau has sought to 

ensure that it is consistent with the 

purposes of Dodd-Frank Act section 

1021(a) and with the objectives of DoddFrank Act section 1021(b), specifically 

including Dodd-Frank Act section 

1021(b)(1) and (3). 

Dodd-Frank Act section 1022(b). 

Section 1022(b)(1) of the Dodd-Frank 

Act authorizes the Bureau to prescribe 

rules ‘‘as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws, and to prevent evasions 

thereof.’’ 12 U.S.C. 5512(b)(1). Section 

1022(b)(2) of the Dodd-Frank Act 

prescribes certain standards for 

rulemaking that the Bureau must follow 

in exercising its authority under section 

1022(b)(1). 12 U.S.C. 5512(b)(2). As 

discussed above, TILA and RESPA are 

Federal consumer financial laws. 

Accordingly, in proposing this rule, the 

Bureau is exercising its authority under 

Dodd-Frank Act section 1022(b) to 

prescribe rules under TILA, RESPA, and 

Title X that carry out the purposes and 

objectives and prevent evasion of those 

laws. See part V for a discussion of the 

Bureau’s standards for rulemaking 

under Dodd-Frank Act section 

1022(b)(2). 

Dodd-Frank Act section 1032. Section 

1032(a) of the Dodd-Frank Act provides 

that the Bureau ‘‘may prescribe rules to 

ensure that the features of any consumer 

financial product or service, both 

initially and over the term of the 

product or service, are fully, accurately, 

and effectively disclosed to consumers 

in a manner that permits consumers to 

understand the costs, benefits, and risks 

associated with the product or service, 

in light of the facts and circumstances.’’ 

12 U.S.C. 5532(a). The authority granted 

to the Bureau in section 1032(a) is broad 

and empowers the Bureau to prescribe 

rules regarding the disclosure of the 

‘‘features’’ of consumer financial 

products and services generally. 

Accordingly, the Bureau may prescribe 

rules containing disclosure 

requirements even if other Federal 

consumer financial laws do not 

specifically require disclosure of such 

features. 

Dodd-Frank Act section 1032(c) 

provides that, in prescribing rules 

pursuant to section 1032, the Bureau 

‘‘shall consider available evidence about 

consumer awareness, understanding of, 

and responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services.’’ 12 U.S.C. 5532(c). 

Accordingly, in developing the TILA– 

RESPA Final Rule under Dodd-Frank 

Act section 1032(a), the Bureau 

considered available studies, reports, 

and other evidence about consumer 

awareness, understanding of, and 

responses to disclosures or 

communications about the risks, costs, 

and benefits of consumer financial 

products or services. Moreover, the 

Bureau has considered the evidence 

developed through its consumer testing 

of the integrated disclosures as well as 

prior testing done by the Board and 

HUD regarding TILA and RESPA 

disclosures. See part III of the TILA– 

RESPA Final Rule for a discussion of 

the Bureau’s consumer testing. 

Dodd-Frank Act section 1405(b). 

Section 1405(b) of the Dodd-Frank Act 

provides that, ‘‘[n]otwithstanding any 

other provision of [title 14 of the DoddFrank Act], in order to improve 

consumer awareness and understanding 

of transactions involving residential 

mortgage loans through the use of 

disclosures, the Bureau may, by rule, 

exempt from or modify disclosure 

requirements, in whole or in part, for 

any class of residential mortgage loans 

if the Bureau determines that such 

exemption or modification is in the 

interest of consumers and in the public 

interest.’’ 15 U.S.C. 1601 note. Section 

1401 of the Dodd-Frank Act, which 

amends TILA section 103(cc)(5), 15 

U.S.C. 1602(cc)(5), generally defines a 

residential mortgage loan as any 

consumer credit transaction that is 

secured by a mortgage on a dwelling or 

on residential real property that 

includes a dwelling other than an openend credit plan or an extension of credit 

secured by a consumer’s interest in a 

timeshare plan. Notably, the authority 

granted by section 1405(b) applies to 

‘‘disclosure requirements’’ generally, 

and is not limited to a specific statute 

or statutes. Accordingly, Dodd-Frank 

Act section 1405(b) is a broad source of 

authority to exempt from or modify the 

disclosure requirements of TILA and 

RESPA. 

In developing rules for residential 

mortgage loans under Dodd-Frank Act 

section 1405(b), the Bureau has 

considered the purposes of improving 

consumer awareness and understanding 

of transactions involving residential 

mortgage loans through the use of 

disclosures, and the interests of 

consumers and the public. 

IV. Section-by-Section Analysis 

A. Regulation X 

Section 1024.5—Coverage of RESPA 

5(d) Partial Exemptions for Certain 

Mortgage Loans 

The Bureau is proposing to amend 

§ 1024.5(d) to remove the crossreferences to § 1024.21(b) and (c) and 

replace them with the appropriate crossreference to § 1024.33(a). 

B. Regulation Z 

General—Technical Corrections 

In addition to the amendments to 

Regulation Z discussed below, the 

Bureau is proposing non-substantive 

technical corrections, including citation 

and cross-reference updates as well as 

wording changes for clarification 

purposes, to various provisions of 

Regulation Z as amended or adopted by 

the TILA–RESPA Final Rule. The 

proposed technical corrections are to 

§§ 1026.37(o) and 1026.38(e) and (k); to 

commentary to §§ 1026.37(b), (c), and 

(h) and 1026.38(a) and (e); and to 

Appendix H. Where appropriate, some 

of these technical corrections and 

wording changes are discussed in the 

applicable sections below. 

Section 1026.19—Certain Mortgage and 

Variable-Rate Transactions 

19(e)(3)(iv)(D) Interest Rate Dependent 

Charges 

As the Bureau acknowledged in the 

TILA–RESPA Final Rule,10 if a loan’s 

interest rate has not been locked at the 

time the initial disclosures are made, or 

a locked interest rate has expired, loan 

terms and costs related to the interest 

rate may change, including the charge or 

credit for the interest rate chosen, the 

adjusted origination charges, and per 

diem interest. Regulation X, 

§ 1024.7(f)(5), currently provides for 

redisclosure of these estimated charges 

in the event that a rate is locked after 

the initial Good Faith Estimate (GFE) 

has been provided: A revised GFE must 

be provided within three business days 

of the interest rate being locked or relocked, showing the revised interest rate 

dependent charges and terms. 

In the TILA–RESPA Proposal, 

proposed § 1026.19(e)(3)(iv)(D) retained 

the same basic approach, but the Bureau 

expressed concern that allowing 

creditors three business days to provide 

revised disclosures after a rate is locked 

could harm consumers through 

creditors engaging in rent-seeking 

behavior or attempting to circumvent 

RESPA and Regulation X. The Bureau 


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11 78 FR 79833 (December 31, 2013). 

thus proposed § 1026.19(e)(3)(iv)(D) to 

permit a revised disclosure in the event 

of a subsequent lock of the interest rate 

but required redisclosure on the same 

date that the rate is locked. 

The Bureau sought comment on the 

frequency and magnitude of revisions to 

the interest rate dependent charges, the 

frequency of cancellations of contractual 

agreements related to interest rate 

dependent charges, such as rate lock 

agreements, and the reasons for such 

revisions and cancellations. The Bureau 

received few comments specific to 

proposed § 1026.19(e)(3)(iv)(D) and 

finalized § 1026.19(e)(3)(iv)(D) as 

proposed with some additional 

clarifications. The Bureau stated that, if 

the interest rate is set without a rate lock 

agreement, § 1026.19(e)(3)(iv)(D) does 

not apply. The Bureau further explained 

that it intended § 1026.19(e)(3)(iv)(D) 

only to apply in situations where a rate 

lock agreement has been entered into 

between the creditor and borrower or 

where such agreement has expired. The 

Bureau also stated that, in its view, 

creditors should not need any 

additional time beyond the date the rate 

is locked to provide revised disclosures 

because the creditor controls when it 

executes the rate lock agreement.11 The 

Bureau added comments 19(e)(3)(iv)(D)– 

1 and 19(e)(4)(i)–2 to provide examples 

and additional explanations. 

As adopted by the Final Rule, 

§ 1026.19(e)(3)(iv)(D) provides for 

revised disclosures when there are 

changes in interest rate dependent 

charges due to a rate lock, extension, or 

re-lock. Section 1026.19(e)(3)(iv)(D) 

states that, in order to revise the 

estimated amounts used to determine 

good faith pursuant to § 1026.19(e)(1), 

the creditor shall provide a revised 

version of the disclosures required 

under § 1026.19(e)(1)(i) to the consumer 

with the revised interest rate, the points 

disclosed pursuant to § 1026.37(f)(1), 

lender credits, and any other interest 

rate dependent charges and terms, on 

the date the rate is locked. 

As part of its regulatory 

implementation outreach, the Bureau 

has received significant feedback on this 

provision since the Final Rule was 

published. Numerous industry 

stakeholders have presented 

information that suggests that creditors 

may not control when a rate is locked 

to the same extent the Bureau believed 

when finalizing the rule, and have 

identified operational challenges due to 

the same-day redisclosure requirement 

in § 1026.19(e)(3)(iv)(D). 

In light of this information and for 

reasons more fully discussed below, the 

Bureau believes the same-day 

redisclosure requirement could 

potentially create a consumer 

disadvantage. Accordingly, the Bureau 

believes that the same-day redisclosure 

requirement warrants reconsideration, 

and is proposing to amend 

§ 1026.19(e)(3)(iv)(D) and its 

commentary to adjust this timing 

requirement. First, the Bureau is 

reassessing the extent to which the 

creditor controls when a rate lock 

agreement arises in some circumstances. 

The Final Rule states that creditors 

generally should be able to control 

when a rate lock agreement is executed, 

even if a consumer requests a rate lock 

the business day before. However, the 

Bureau believes that creditors may not 

always control when the agreement is 

formed in all situations. Moreover, 

flexibilities that exist under existing 

practices may be advantageous to 

consumers. For example, some creditors 

permit the consumer, or loan originator 

working on behalf of the consumer, to 

lock the interest rate unilaterally at any 

point during a business day or even 

after business hours. Under these 

practices, the consumer has the 

flexibility to lock the rate and form that 

agreement late in a business day or after 

business hours. 

The Bureau believes this flexibility 

may be beneficial to consumers, because 

it allows them to lock interest rates on 

a date and time of their choosing 

without time restrictions being imposed 

by the creditor. The same-day 

redisclosure requirement could restrict 

this flexibility and reduce consumers’ 

ability to determine when their rates 

may be locked. If creditors are required 

to provide revised disclosures to 

consumers the same date that the rate is 

locked, and a consumer asks to lock a 

rate late in the business day or after 

hours, creditors may be unable to 

provide a revised Loan Estimate that 

same date. Given the potential 

consequences of losing the ability to 

reset the applicable tolerances for 

interest rate-dependent charges 

pursuant to § 1026.19(e)(3), the Bureau 

believes creditors may respond to the 

Final Rule by limiting consumers’ 

ability to lock rates at the time of their 

choice. Creditors may do this either by 

imposing cut-off times after which 

consumers are unable to lock their 

interest rates until the next day or by 

refusing to lock the rate contractually 

until the business day after the 

consumer requests a rate lock. The 

Bureau believes that both reactions to 

the Final Rule could be disadvantageous 

to consumers. 

If creditors impose cut-off times, 

consumers would be limited in the 

times of day that they or their 

representatives could lock interest rates. 

This could be problematic or 

inconvenient to consumers, particularly 

those who are in different time zones 

than their creditors, and could result in 

consumers missing the applicable 

windows to lock on a day of their choice 

and having to wait until the next 

business day to do so. Alternatively, the 

Bureau believes some creditors may be 

able to provide revised disclosures on 

the same date that a rate lock agreement 

is formed if those creditors only allow 

consumers to request the rate at a time 

of their choosing, and then later execute 

or form a binding agreement with the 

consumer. However, the Bureau 

believes this result could present other 

challenges to consumers. For example, 

consumers may be confused if they 

believe they are locking an interest rate 

at a certain time, but in fact are merely 

requesting rates that are not 

contractually binding until the creditor 

accepts the request, which may not be 

until the next business day. 

Accordingly, the Bureau believes that 

the same-day redisclosure requirement 

could create implementation challenges 

to industry that may result in 

unintended reduced consumer 

flexibility in locking or resetting floating 

interest rates. 

For these reasons, the Bureau believes 

the same-day redisclosure requirement 

warrants reconsideration. The Bureau 

maintains that there is a benefit to 

consumers in receiving the revised Loan 

Estimate as early as possible to enable 

the consumer to evaluate the 

information. The Bureau also believes 

that a creditor should be able to provide 

a revised Loan Estimate based on 

interest rate dependent charges more 

quickly in comparison to other types of 

disclosures, because the creditor may 

not need to obtain information from 

other parties, such as third party 

vendors. However, the Bureau believes 

that providing for redisclosure on the 

next business day after the rate is locked 

would still further these purposes but 

without the operational challenges 

presented by a same-day redisclosure 

requirement. Accordingly, the Bureau is 

proposing to revise 

§ 1026.19(e)(3)(iv)(D) to provide that 

creditors shall redisclose the interest 

rate and interest rate dependent charges 

no later than the next business day after 

the date the interest rate is locked. The 

proposal also would make conforming 

changes to comments 19(e)(3)(iv)(D)–1 

and 19(e)(4)(i)–2, which provide 

illustrations of the provision’s 

application. 

The Bureau seeks comment on 

whether there is potential for consumer 


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harm if creditors are allowed a business 

day to provide revised Loan Estimates 

or benefit to consumers in retaining the 

same-day redisclosure requirement. The 

Bureau also seeks comment as to 

whether a single business day is 

sufficient for creditors to deliver or 

place in the mail a revised Loan 

Estimate modifying interest rate 

dependent charges and terms without 

the unintended consequences described 

in this proposal and, conversely, 

whether there is consumer harm that 

would result from allowing redisclosure 

more than one business day after the 

interest rate is locked. 

Section 1026.36—Prohibited Acts or 

Practices and Certain Requirements for 

Credit Secured by a Dwelling 

36(g) Name and NMLSR ID on Loan 

Documents 

36(g)(2)(ii) 

The Bureau is proposing to amend 

§ 1026.36(g)(2)(ii) to conform to the 

requirements adopted by the 2013 Loan 

Originator Compensation Final Rule. 

Section 1026.36(g)(2) lists the specific 

loan documents that must contain the 

loan originator’s name and NMLSR ID. 

The Bureau explained in the 2013 Loan 

Originator Compensation Final Rule 

that it was reserving § 1026.36(g)(2)(ii) 

for references to the integrated 

disclosures the Bureau was expecting to 

adopt in the final rule implementing the 

2012 TILA–RESPA Integration Proposal. 

The disclosures referenced are those 

required by § 1026.19(e) and (f) in the 

TILA–RESPA Final Rule. Accordingly, 

the Bureau is proposing to amend 

§ 1026.36(g)(2)(ii) to include in the list 

of loan documents the disclosures 

described § 1026.19(e) and (f), as 

adopted by the TILA–RESPA Final Rule. 

Section 1026.37 Content of Disclosure 

for Certain Mortgage Transactions (Loan 

Estimate) 

37(b) Loan Terms 

37(b)(6) Adjustments After 

Consummation 

Section 1026.37(b)(6) requires 

creditors to disclose that adjustments to 

principal, interest, and periodic 

payment may occur after 

consummation, including the date when 

the adjustment may first occur. As 

stated in comment 37(b)(8)–1, for 

adjustments that occur less than 24 

months after consummation, the Bureau 

intended that date to be disclosed as a 

month, whereas for adjustments that 

occur after 24 months, as a whole year. 

Thus, an adjustment that first occurs 20 

months after consummation would be 

disclosed as occurring in ‘‘month 20,’’ 

whereas an adjustment that occurs 37 

months after consummation would 

disclosed as occurring in ‘‘year 3,’’ not 

in ‘‘year 3.1.’’ Comment 37(b)(6)–1, 

which provides for this timing 

mechanism, implies that comment 

37(a)(10)–3 should be used to determine 

all adjustments that occur in periods not 

in whole years. While the Bureau 

intended that comment 37(a)(10)–3.ii be 

used to guide creditors regarding how to 

disclose terms of less than 24 months, 

comment 37(a)(10)–3.i provides that 

decimals should be used for periods 

greater than 24 months. The Bureau did 

not intend this guidance to be 

applicable to § 1026.37(b)(6); rather, any 

such period should be disclosed in 

whole years as stated in comment 

37(b)(8)–1. Accordingly, the Bureau is 

proposing to revise comment 37(b)(6)–1 

to align it with the commentary 37(b)(8) 

and ensure consistency in the reporting 

of time periods. Specifically, the Bureau 

proposes that guidance provided in 

37(a)(10)–3 only should be referenced 

when reporting increases that occur less 

than 24 months after consummation but 

does not equate to a number of whole 

years or a number of days less than a 

week. For all other increases, whole 

years should be used in accordance with 

comment 37(b)(8)–1. 

37(c) Projected Payments 

37(c)(2) Itemization 

37(c)(2)(ii) and 37(c)(2)(iii) 

The Bureau is proposing to move the 

reference to the disclosure of mortgage 

insurance premiums as ‘‘0’’ where no 

escrow account is established to pay 

charges, such as property taxes or 

homeowners association fees, from 

comment 37(c)(ii)–2 and move it to 

comment 37(c)(2)(iii)–1. The Bureau 

believes that this reference is better 

suited in comment 37(c)(2)(iii), which 

provides for escrow disclosure. The 

Bureau also is proposing to amend 

comment 37(c)(2)(iii)–1 to state that the 

escrow payment should be disclosed as 

‘‘—’’ if an escrow account is established 

for the payment of amounts identified in 

§ 1026.37(c)(4)(ii), but no escrow 

payment is required with a particular 

periodic payment or range of payments, 

consistent with the disclosure of 

mortgage insurance premiums in 

comment 37(c)(2)(ii)–1. 

37(c)(4) Taxes, Insurance, and 

Assessments 

37(c)(4)(iv) 

The Bureau is proposing to revise 

comment 37(c)(4)(iv)–2 to remove the 

reference to property taxes and 

homeowner’s insurance to clarify that 

the amounts disclosed pursuant to 

§ 1026.37(c)(4)(ii) may be paid by the 

creditor using some funds from the 

escrow account. 

37(h) Calculating Cash To Close 

37(h)(1) For all Transactions 

37(h)(1)(ii) Closing Costs Financed 

The Bureau is proposing to revise 

comment 37(h)(1)(ii)–1 to reflect the 

intended meaning of the regulatory text 

in § 1026.37(h)(1)(ii), which requires 

disclosure, in the Loan Estimate, of the 

amount, expressed as a negative 

number, of any closing costs that are to 

be paid from the loan proceeds. The 

Bureau explained in the preamble to the 

Final Rule that the amount disclosed 

under § 1026.37(h)(1)(ii) is determined 

by subtracting the estimated total 

amount of payments to third parties not 

otherwise disclosed pursuant to 

§ 1026.37(f) and (g) from the total loan 

amount so long as the amount is a 

positive number and does not exceed 

the total closing costs disclosed under 

§ 1026.37(g)(6), but comment 

37(h)(1)(ii)–1 referenced ‘‘lender 

credits’’ instead of ‘‘closing costs.’’ 

Accordingly, the Bureau is proposing to 

remove the words ‘‘lender credits’’ and 

replace them with the words ‘‘closing 

costs’’ to harmonize with the preamble, 

which correctly reflected the Bureau’s 

intent. 

37(m) Other Considerations 

Section 1026.19(e)(3)(iv)(F) governs 

redisclosures on new construction loans 

when the creditor reasonably expects 

settlement to occur more than 60 days 

after providing the initial Loan Estimate. 

Section 1026.19(e)(3)(iv)(F) provides 

that a creditor may issue a revised 

disclosure if the original disclosure 

clearly and conspicuously states the 

creditor may issue revised disclosures at 

any time prior to 60 days before 

consummation. If no such statement is 

provided, the creditor may not issue 

revised disclosures, except as otherwise 

provided in § 1026.19(f). 

The Bureau intended to permit 

creditors that make new construction 

loans and reasonably expect settlement 

to occur more than 60 calendar days 

after the initial Loan Estimate is 

provided to state on the Loan Estimate 

that the creditor may issue revised 

disclosures. However, § 1026.37, which 

prescribes the content for the 

disclosures provided on the Loan 

Estimate pursuant to § 1026.19(e)(1)(i), 

does not permit the creditor to state that 

it may issue revised disclosures. The 

proposal would add a new provision 

allowing the creditor to make the 

statement on the Loan Estimate form. 

Creditors would thus be able to preserve 


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12Specifically, section 1022(b)(2)(A) of the DoddFrank Act calls for the Bureau to consider the 

potential benefits and costs of a regulation to 

consumers and covered persons, including the 

potential reduction of access by consumers to 

consumer financial products or services; the impact 

on depository institutions and credit unions with 

$10 billion or less in total assets as described in 

section 1026 of the Dodd-Frank Act; and the impact 

on consumers in rural areas. 

the ability to provide the borrower with 

a revised loan estimate if settlement is 

not expected to occur for more than 60 

days after the disclosures required by 

§ 1026.19(e) are provided. 

The Bureau is proposing to add new 

§ 1026.37(m)(8), under the master 

heading ‘‘Additional Information About 

This Loan’’ and under the heading 

‘‘Other Considerations,’’ and believes 

the § 1026.19(e)(3)(iv)(F) language is 

appropriately placed in this section of 

§ 1026.37. The Bureau also is proposing 

to add new comment 37(m)(8)–1 to state 

that placement of the language here 

satisfies the ‘‘clear and conspicuous’’ 

standard set forth in 

§ 1026.19(e)(3)(iv)(F). The Bureau 

invites comments on whether this is the 

most appropriate placement or if there 

are other areas on the Loan Estimate 

form that are more appropriate. 

Section 1026.38—Content of Disclosures 

for Certain Mortgage Transactions 

(Closing Disclosure) 

38(a) General Information 

38(a)(3) Closing Information 

38(a)(3)(vi) 

The Bureau is proposing to add new 

commentary to § 1026.38(a)(3)(vi) to 

clarify that, in the case of multiple 

properties securing the transaction, the 

property address for all properties must 

be disclosed on the Closing Disclosure. 

Comment 37(a)(6)–3 provides that, 

where more than one property secures 

the credit transaction, all property 

addresses securing the transaction must 

be disclosed on the Loan Estimate 

pursuant to § 1026.37(a)(6). The Bureau 

believes that the requirement to disclose 

all real property securing the transaction 

must also be applied to the Closing 

Disclosure to ensure consistency 

between the two forms. 

Accordingly, the Bureau is proposing 

to add new comment 38(a)(3)(vi)–2 to 

clarify that the addresses of all 

properties securing the transaction must 

be disclosed on the Closing Disclosure. 

Furthermore, proposed comment 

38(a)(3)(vi)–2 would clarify that 

additional pages may be appended to 

the end of the form with the real 

property information if there is not 

enough space on the Closing Disclosure. 

38(e) Alternative Calculating Cash To 

Close Table for Transactions Without a 

Seller 

38(e)(1) Loan Amount 

38(e)(1)(iii)(A) 

The Bureau is proposing to amend 

comment 38(e)(1)(iii)(A)–1 to clarify the 

statement identifying a difference 

between the loan amount in the Loan 

Estimate and Closing Disclosure, 

pursuant to § 1026.38(e)(1)(iii)(A). The 

Bureau is proposing to amend comment 

38(e)(1)(iii)(A)–1 to replace ‘‘You 

increased this amount’’ with ‘‘This 

amount increased.’’ 

38(e)(2) Total Closing Costs 

38(e)(2)(iii)(A) 

The Bureau is proposing to add 

commentary to § 1026.38(e)(2) to 

harmonize the disclosure of increases or 

decreases in closing costs between the 

‘‘Alternative Calculating Cash to Close’’ 

table, which may be used for 

transactions without a seller, and the 

general ‘‘Calculating Cash to Close’’ 

table. Section 1026.38(i) and comment 

38(i)–4, which prescribe content for the 

general ‘‘Calculating Cash to Close’’ 

table, require statements regarding any 

excess amount and any credit to the 

consumer be disclosed on the table. 

However, a parallel comment was not 

adopoted or incorporated by reference 

in § 1026.38(e) for the alternative table. 

The Bureau intended that the same 

requirement apply to the alternative 

table and is proposing to add comment 

to section 38(e)(2)(iii)(A) to reflect the 

intended meaning of 

§ 1026.38(e)(2)(iii)(A) and harmonize 

the commentary with section 38(i)(1)–3, 

which interprets § 1026.38(i)(1). 

38(e)(3) Closing Costs Paid Before 

Closing 

38(e)(3)(iii)(A) 

The Bureau is proposing to amend 

§ 1026.38(e)(3)(iii)(A), which applies to 

the ‘‘Alternative Calculating Cash to 

Close’’ table, to harmonize it with the 

parallel provision in 

§ 1026.38(i)(2)(iii)(A), which applies to 

the general ‘‘Calculating Cash to Close’’ 

table. The Bureau intended that that 

these two provisions require, among 

other things, a statement that the 

consumer ‘‘paid such amounts prior to 

consummation of the transaction,’’ as 

reflected in § 1026.38(i)(2)(iii)(A). 

However, § 1026.38(e)(3)(iii)(A), as 

adopted by the TILA–RESPA Final Rule 

contains different language. 

Accordingly, the Bureau is proposing to 

amend § 1026.38(e)(3)(iii)(A) to 

harmonize these two provisions. 

V. Dodd-Frank Act Section 1022(b)(2) 

A. Overview 

In developing the proposed rule, the 

Bureau has considered potential 

benefits, costs, and impacts.12 The 

Bureau requests comment on the 

preliminary analysis presented below as 

well as submissions of additional data 

that could inform the Bureau’s analysis 

of the benefits, costs, and impacts. The 

Bureau has consulted, or offered to 

consult with, the prudential regulators, 

the Securities and Exchange 

Commission, the Department of Housing 

and Urban Development, the Federal 

Housing Finance Agency, the Federal 

Trade Commission, the U.S. Department 

of Veterans Affairs, the U.S. Department 

of Agriculture, and the Department of 

the Treasury, including regarding 

consistency with any prudential, 

market, or systemic objectives 

administered by such agencies. 

This rule proposes two main 

amendments to provisions adopted by 

the TILA–RESPA Final Rule. First, the 

Bureau is proposing to amend 

§ 1026.19(e)(3)(iv)(D) and related 

commentary to relax a timing 

requirement that currently requires 

creditors to redisclose the interest rate 

and interest rate dependent charges to 

the consumer on the date that the rate 

is locked. The proposed amendment 

would require creditors to redisclose the 

interest rate and interest rate dependent 

charges no later than the next business 

day after the rate is locked. 

The Bureau believes that, absent the 

proposed change, this requirement is 

likely to result in at least some creditors 

limiting consumers’ ability to lock their 

interest rates only to times early in a 

business day due to the implementation 

costs of getting the disclosure to the 

consumer the same date if the consumer 

requested a rate lock sufficiently late 

during the business day or after hours. 

The Bureau believes that consumers are 

unlikely to choose creditors based on 

the creditors’ policies regarding interest 

rate locks. Moreover, consumers would 

be unlikely to know whether their 

creditors will in fact allow interest rate 

locks at all times until the consumer 

actually attempts to lock the interest 

rate. Consequently, consumers could 

experience inconvenience because 

creditors limit when they may lock their 

interest rates. Furthermore, because 

consumers are unlikely to know of this 

practice until they attempt to lock a 

floating interest rate, it is unlikely that 

this practice would be corrected or 

influenced by market competition. 

The second proposed amendment 

would permit creditors to state on the 

Loan Estimate that the creditor may 


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issue revised disclosures if settlement is 

reasonably expected to occur more than 

60 calendar days after the initial Loan 

Estimate is provided. The proposal 

would add a new provision allowing the 

creditor to make the statement on the 

Loan Estimate form, and thus enable 

creditors to preserve their ability to 

provide borrowers with revised loan 

estimates in these circumstances. 

Without the proposed amendment, 

creditors may have lower incentives to 

originate construction loans, especially 

if they believe that the estimates 

provided in the Loan Estimate might 

need to be revised. As a result, 

consumers either would be unable to get 

construction loans until most of the 

uncertainty about estimated costs is 

resolved or consumers will be offered 

construction loans with a priced-in 

premium that reflects the possibility 

that the creditor is not able to redisclose 

estimates after the initial 60 days. 

The Bureau believes that both 

proposed amendments would provide 

options that a creditor is free to 

undertake or not to undertake, and thus 

present no cost to creditors. The Bureau 

believes that both proposed 

amendments would present some 

benefits to creditors. The Bureau 

believes that the first proposed 

amendment could present both benefits 

and costs to consumers, while the 

second proposed amendment presents 

benefits to consumers. 

B. Potential Benefits and Costs to 

Consumers and Covered Persons 

Relaxing the Same-Day Redisclosure 

Requirement for Interest Rate Locks 

The proposed amendment would 

provide an option to creditors: Creditors 

may avail themselves of an extra 

business day to redisclose interest rate 

and interest rate dependent charges, but 

do not have to. They also may continue 

to provide revised disclosures on the 

same date that the rate is locked if they 

choose. Therefore, some creditors will 

benefit if the proposed amendment is 

adopted by not having to redisclose on 

the same date the rate is locked, while 

other creditors could continue to 

redisclose on the date the rate is locked 

if they choose and are as well off as they 

would have been without this proposed 

amendment. Overall, if the proposed 

amendment is adopted, some creditors 

will benefit, others may not, all 

creditors will enjoy increased flexibility, 

but no creditors will face increased 

costs. 

Under the current rule, the Bureau 

believes that some creditors could 

continue offering flexible time periods 

for interest rate locks, but others, for 

example, might choose to limit when 

consumers may lock interest rates in 

order to ease the compliance cost. Other 

creditors might continue to allow 

consumers to request a lock at any time 

but only lock the rate contractually the 

business day after the consumer 

requests a rate lock, instead of on the 

date the consumer requests the rate 

lock. Consumers of these creditors could 

benefit from the proposed amendment 

through the increased convenience of 

being able to lock in the interest rate at 

any time during the day. 

Consumers of creditors that continue 

to allow flexibility in locking interest 

rates might experience a cost: Their 

revised disclosures might not be 

available until the next business day if 

the proposed amendment is adopted. 

However, some of these creditors might 

still provide revised disclosures on the 

same date that the interest rate is 

locked. If they do not provide the 

revised disclosure until the next 

business day, then the potential 

consumer harm is the time difference 

between when the consumers would 

receive revised disclosures. 

The Bureau does not possess any data, 

and is not aware of a source to obtain 

data, that would enable it to report the 

quantitative effects of this provision, for 

example, the number of creditors that 

would not let their consumers lock the 

interest rate in the afternoon or in the 

evening if the provision is not adopted. 

The Bureau seeks comment on this 

issue. 

Specific Language on Loan Estimates for 

New Construction Loans 

The Bureau believes that, without the 

proposed amendment, creditors that 

ordinarily originate construction loans 

could be forced either to originate only 

those construction loans for which the 

creditor is certain that no redisclosure 

prior to settlement will be necessary or 

to price in the risk of having to cure any 

amounts charged over the estimates 

initially provided more than 60 days 

before settlement. Creditors that price in 

the risk, including the estimated cost of 

cure in their pricing, risk miscalibrating 

the pricing and losing consumers to less 

risk-averse competitors or facing 

unanticipated costs related to cure for 

the failure to redisclose more accurate 

costs. In all events, creditors risk losing 

consumers to other options. In all 

events, the proposed amendment 

presents benefits to the creditors that 

decide to originate construction loans 

and presents no costs. 

As noted above, under the current 

rule, a consumer who needs a new 

construction loan may only be able to 

obtain a construction loan where the 

creditor has priced in the risk of having 

to cure any amounts charged over the 

estimates initially provided over 60 

days before settlement, and that is a cost 

to consumers. On the other hand, if the 

proposed amendment is not adopted, 

yet the consumer manages to receive a 

construction loan, then the Loan 

Estimate provides consumers more 

certainty, given that creditors would be 

limited in their ability to redisclose 

estimated costs and reset the applicable 

tolerances. In situations where creditors 

misgauged estimates provided in the 

initial Loan Estimate, consumers might 

be entitled to receive a cure of any 

differences between the initial 

disclosure and the final costs at closing, 

to the extent such differences exceed 

applicable tolerances. However, the 

Bureau believes that these benefits to 

consumers are marginal, given that costs 

associated with construction loans are 

inherently volatile beyond the creditor’s 

control. As a result, the Bureau believes 

that creditors unable to redisclose 

estimates given more than 60 days prior 

to consummation would be less likely to 

originate such loans. 

The Bureau does not possess any data, 

and is not aware of a source to obtain 

data, that would enable it to report the 

number of transactions affected or to 

quantify the extent of creditor and 

consumer benefits. The Bureau seeks 

comment on this issue. 

C. Impact on Covered Persons With No 

More Than $10 Billion in Assets 

The Bureau believes that covered 

persons with no more than $10 billion 

in assets will not be differentially 

affected by the proposed amendment 

regarding construction loans. 

The proposed amendment regarding 

interest rate locks might have two 

particular effects on covered persons 

with no more than $10 billion in assets. 

First, covered persons with no more 

than $10 billion in assets are more likely 

to benefit from this proposed provision 

to the extent that redisclosure on the 

same business day of an interest rate 

lock that occurred close to the end of 

the business day might require software 

and business processes upgrade costs. 

Larger covered persons are more likely 

to originate a sufficient number of 

transactions to make it worth 

implementing these changes, as 

opposed to choosing to offer interest 

rate locks only at set times during 

business hours. 

Secondly, creditors located in more 

than one time zone might have to offer 

a shorter preset adjustment time to some 

customers (for example, if the location 

of the rate lock operation is in the 

Eastern Time zone), but covered persons 

with no more than $10 billion in assets 


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are more likely to be located in a single 

time zone. From this perspective, 

covered persons with no more than $10 

billion in assets are less likely to benefit 

from this proposed amendment. The 

Bureau does not possess data to quantify 

either of the two possible 

aforementioned effects of the proposed 

amendment on covered persons with no 

more than $10 billion in assets. 

D. Impact on Access to Credit 

The Bureau does not believe that 

there will be an adverse impact on 

access to credit resulting from any of the 

two provisions. Moreover, it is possible 

that there will be an expansion of access 

to credit, if the proposed amendment 

regarding construction loans facilitates 

the making of new construction loans, 

as the Bureau anticipates. 

E. Impact on Rural Areas 

The Bureau believes that rural areas 

might benefit from these two proposed 

provisions more than urban areas. 

Competition might drive creditors to 

originate construction loans despite the 

possible redisclosure issues and to 

provide interest rate locks throughout 

the day despite the same business day 

redisclosure requirement. To the extent 

that there are fewer creditors operating 

in rural areas than in urban areas with 

correspondingly reduced competition, 

and to the extent that competition 

would actually matter for these two 

issues, rural areas are most likely to 

suffer the potential harms the proposed 

amendments seek to address. Therefore, 

rural areas may conversely see the 

largest benefit from the proposed 

amendments. 

VI. Regulatory Flexibility Act Analysis 

The Regulatory Flexibility Act (the 

RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, requires each 

agency to consider the potential impact 

of its regulations on small entities, 

including small businesses, small 

governmental units, and small nonprofit 

organizations. The RFA defines a ‘‘small 

business’’ as a business that meets the 

size standard developed by the Small 

Business Administration pursuant to the 

Small Business Act. 

The RFA generally requires an agency 

to conduct an initial regulatory 

flexibility analysis (IRFA) and a final 

regulatory flexibility analysis (FRFA) of 

any rule subject to notice-and-comment 

rulemaking requirements, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

The Bureau also is subject to certain 

additional procedures under the RFA 

involving the convening of a panel to 

consult with small business 

representatives prior to proposing a rule 

for which an IRFA is required. 

An IRFA is not required for this 

proposal because the proposal, if 

adopted, would not have a significant 

economic impact on any small entities. 

The Bureau does not expect the 

proposal to impose costs on covered 

persons. All methods of compliance 

under current law will remain available 

to small entities if the proposal is 

adopted. Thus, a small entity that is in 

compliance with current law need not 

take any additional action if the 

proposal is adopted. 

Accordingly, the undersigned certifies 

that this proposal, if adopted, would not 

have a significant economic impact on 

a substantial number of small entities. 

VII. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501 et seq.), 

Federal agencies are generally required 

to seek the Office of Management and 

Budget (OMB) approval for information 

collection requirements prior to 

implementation. The collections of 

information related to Regulations Z and 

X have been previously reviewed and 

approved by OMB in accordance with 

the PRA and assigned OMB Control 

Number 3170–0015 (Regulation Z) and 

3170–0016 (Regulation X). Under the 

PRA, the Bureau may not conduct or 

sponsor and, notwithstanding any other 

provision of law, a person is not 

required to respond to an information 

collection unless the information 

collection displays a valid control 

number assigned by OMB. 

The Bureau has determined that this 

Proposed Rule would not impose any 

new or revised information collection 

requirements (recordkeeping, reporting, 

or disclosure requirements) on covered 

entities or members of the public that 

would constitute collections of 

information requiring OMB approval 

under the PRA. The Bureau welcomes 

comments on this determination or any 

other aspect of this proposal for 

purposes of the PRA. Comments should 

be submitted as outlined in the 

ADDRESSES section above. All comments 

will become a matter of public record. 

List of Subjects 

12 CFR Part 1024 

Condominiums, Consumer protection, 

Housing, Mortgage servicing, Mortgages, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 1026 

Advertising, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Recordkeeping and 

recordkeeping requirements, Reporting, 

Savings associations, Truth in lending. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau proposes to 

amend Regulation X, 12 CFR part 1024, 

and Regulation Z, 12 CFR part 1026, as 

set forth below: 

PART 1024—REAL ESTATE 

SETTLEMENT PROCEDURES ACT 

(REGULATION X) 

■ 1. The authority citation for part 1024 

continues to read as follows: 

Authority: 12 U.S.C. 2603–2605, 2607, 

2609, 2617, 5512, 5532, 5581. 

Subpart A—General Provisions 

■ 2. Section 1024.5 is amended by 

revising paragraph (d) introductory text 

to read as follows: 

§ 1024.5 Coverage of RESPA. 

* * * * * 

(d) Partial exemptions for certain 

mortgage loans. Sections 1024.6, 1024.7, 

1024.8, 1024.10, and 1024.33(a) do not 

apply to a federally related mortgage 

loan: 

* * * * * 

PART 1026—TRUTH IN LENDING 

(REGULATION Z) 

■ 3. The authority citation for part 1026 

continues to read as follows: 

Authority: 12 U.S.C. 2601, 2603–2605, 

2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 

U.S.C. 1601 et seq. 

* * * * * 

Subpart C—Closed-End Credit 

■ 4. Section 1026.19 is amended by 

revising paragraph (e)(3)(iv)(D) to read 

as follows: 

§ 1026.19 Certain mortgage and variablerate transactions. 

* * * * * 

(e) * * * 

(3) * * * 

(iv) * * * 

(D) Interest rate dependent charges. 

The points or lender credits change 

because the interest rate was not locked 

when the disclosures required under 

paragraph (e)(1)(i) of this section were 

provided. No later than the next 

business day after the date the interest 

rate is locked, the creditor shall provide 

a revised version of the disclosures 

required under paragraph (e)(1)(i) of this 

section to the consumer with the revised 

interest rate, the points disclosed 

pursuant to § 1026.37(f)(1), lender 


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credits, and any other interest rate 

dependent charges and terms. 

* * * * * 

Subpart E—Special Rules for Certain 

Home Mortgage Transactions 

■ 5. Section 1026.36 is amended by 

adding paragraph (g)(2)(ii) to read as 

follows: 

§ 1026.36 Prohibited acts or practices and 

certain requirements for credit secured by 

a dwelling. 

* * * * * 

(g) * * * 

(2) * * * 

(ii) The disclosures required by 

§ 1026.19 (e) and (f); 

* * * * * 

■ 6. Section 1026.37 is amended by 

adding paragraph (m)(8) and revising 

paragraph (o)(4)(i)(A) to read as follows: 

§ 1026.37 Content of disclosures for 

certain mortgage transactions (Loan 

Estimate). 

* * * * * 

(m) * * * 

(8) New construction loans. In 

transactions involving new 

construction, where the creditor 

reasonably expects that settlement will 

occur more than 60 days after the 

provision of the loan estimate, at the 

creditor’s option, a clear and 

conspicuous statement that the creditor 

may issue a revised disclosure any time 

prior to 60 days before consummation, 

pursuant to § 1026.19(e)(3)(iv)(F). 

* * * * * 

(o) * * * 

(4) * * * 

(i) * * * 

(A) The dollar amounts required to be 

disclosed by paragraphs (b)(6) and (7), 

(c)(1)(iii), (c)(2)(ii) and (iii), (c)(4)(ii), (f), 

(g), (h), (i), and (l) of this section shall 

be rounded to the nearest whole dollar, 

except that the per diem amount 

required to be disclosed by paragraph 

(g)(2)(iii) of this section and the monthly 

amounts required to be disclosed by 

paragraphs (g)(3)(i) through (iii) and 

(g)(3)(v) of this section shall not be 

rounded. 

* * * * * 

■ 7. Section 1026.38 is amended by 

revising paragraphs (e)(3)(iii)(A), 

(e)(4)(ii), and (k)(2)(v) and (vi) to read as 

follows: 

§ 1026.38 Content of disclosures for 

certain mortgage transactions (Closing 

Disclosure). 

* * * * * 

(e) * * * 

(3) * * * 

(iii) * * * 

(A) If the amount disclosed under 

paragraph (e)(3)(ii) of this section is 

different than the amount disclosed 

under paragraph (e)(3)(i) of this section 

(unless the difference is due to 

rounding), a statement of that fact, along 

with a statement that the consumer paid 

such amounts prior to consummation of 

the transaction; or 

* * * * * 

(4) * * * 

(ii) Under the subheading ‘‘Final,’’ the 

total amount of payoffs and payments 

made to third parties disclosed pursuant 

to paragraph (t)(5)(vii)(B) of this section, 

to the extent known, disclosed as a 

negative number; 

* * * * * 

(k) * * * 

(2) * * * 

(v) The amount of any loan secured by 

a first lien on the property that will be 

paid off as part of the real estate closing, 

labeled ‘‘Payoff of First Mortgage Loan’’; 

(vi) The amount of any loan secured 

by a second lien on the property that 

will be paid off as part of the real estate 

closing, labeled ‘‘Payoff of Second 

Mortgage Loan’’; 

* * * * * 

■ 8. Appendix H to part 1026 is 

amended by revising the Description in 

H–24(G) to read as follows: 

Appendix H to Part 1026—Closed-End 

Forms and Clauses 

* * * * * 

H–24(G) Mortgage Loan Transaction Loan 

Estimate—Modification to Loan Estimate for 

Transaction Not Involving Seller—Model 

Form 

Description: This is a blank model Loan 

Estimate that illustrates the application of the 

content requirements in § 1026.37, with the 

optional alternative tables permitted by 

§ 1026.37(d)(2) and (h)(2) for transactions 

without a seller. This form provides one 

variation of page one, four variations of page 

two, and four variations of page three, 

reflecting the variable content requirements 

in § 1026.37. 

* * * * * 

■ 9. In Supplement I to part 1026: 

■ a. Under Section 1026.19—Certain 

Mortgage and Variable-Rate 

Transactions: 

■ i. Under paragraph 19(e)(3)(iv)(D), 

paragraph 1 is revised. 

■ ii. Under paragraph 19(e)(4)(i), 

paragraph 2 is revised. 

■ b. Under Section 1026.37—Content of 

Disclosures for Certain Mortgage 

Transactions (Loan Estimate): 

■ i. Under paragraph 37(b)(6), paragraph 

1 is revised. 

■ ii. Under paragraph 37(c)(2)(ii), 

paragraph 2 is revised. 

■ ii. Under paragraph 37(c)(2)(iii), 

paragraph 1 is revised. 

■ iii. Under paragraph 37(c)(4)(iv), 

paragraph 2 is revised. 

■ iv. Under paragraph 37(h)(1)(ii), 

paragraph 1 is revised. 

■ v. Under paragraph 37(m), the 

subheading 37(m)(8) New construction 

loans and paragraph 1 are added. 

■ vi. Under paragraph 37(n), paragraph 

2 is revised. 

■ c. Under Section 1026.38—Content of 

Disclosures for Certain Mortgage 

Transactions (Closing Disclosure): 

■ i. Under paragraph 38(a)(3)(vi), 

paragraph 2 is added. 

■ ii. Under paragraph 38(e)(1)(iii)(A), 

paragraph 1 is revised. 

■ iii. Under paragraph 38(e)(2)(iii)(A), 

paragraph 3 is added. 

The revisions and additions read as 

follows: 

Supplement I to Part 1026—Official 

Interpretations 

* * * * * 

Subpart C—Closed-End Credit 

* * * * * 

Section 1026.19—Certain Mortgage and 

Variable-Rate Transactions 

* * * * * 

19(e) Mortgage loans secured by real 

property—Early disclosures. 

* * * * * 

19(e)(3) Good faith determination for 

estimates of closing costs. 

* * * * * 

Paragraph 19(e)(3)(iv)(D) Interest rate 

dependent charges. 

1. Requirements. If the interest rate is not 

locked when the disclosures required by 

§ 1026.19(e)(1)(i) are provided, a valid reason 

for revision exists when the interest rate is 

subsequently locked. No later than the next 

business day after the date the interest rate 

is locked, § 1026.19(e)(3)(iv)(D) requires the 

creditor to provide a revised version of the 

disclosures required under § 1026.19(e)(1)(i) 

reflecting the revised interest rate, the points 

disclosed pursuant to § 1026.37(f)(1), lender 

credits, and any other interest rate dependent 

charges and terms. The following examples 

illustrate this requirement: 

i. Assume a creditor sets the interest rate 

by executing a rate lock agreement with the 

consumer. If such an agreement exists when 

the original disclosures required under 

§ 1026.19(e)(1)(i) are provided, then the 

actual points and lender credits are 

compared to the estimated points disclosed 

pursuant to § 1026.37(f)(1) and lender credits 

included in the original disclosures provided 

under § 1026.19(e)(1)(i) for the purpose of 

determining good faith pursuant to 

§ 1026.19(e)(3)(i). If the consumer enters into 

a rate lock agreement with the creditor after 

the disclosures required under 

§ 1026.19(e)(1)(i) were provided, then 

§ 1026.19(e)(3)(iv)(D) requires the creditor to 

provide, no later than the next business day 

after the date that the consumer and the 

creditor enter into a rate lock agreement, a 

revised version of the disclosures required 

under § 1026.19(e)(1)(i) reflecting the revised 

interest rate, the points disclosed pursuant to 

§ 1026.37(f)(1), lender credits, and any other 


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64346 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Proposed Rules 

interest rate dependent charges and terms. 

Provided that the revised version of the 

disclosures required under § 1026.19(e)(1)(i) 

reflect any revised points disclosed pursuant 

to § 1026.37(f)(1) and lender credits, the 

actual points and lender credits are 

compared to the revised points and lender 

credits for the purpose of determining good 

faith pursuant to § 1026.19(e)(3)(i). 

* * * * * 

19(e)(4) Provision and receipt of revised 

disclosures. 

Paragraph 19(e)(4)(i) General rule. 

* * * * * 

2. Relationship to § 1026.19(e)(3)(iv)(D). If 

the reason for the revision is provided under 

§ 1026.19(e)(3)(iv)(D), notwithstanding the 

three-business-day rule set forth in 

§ 1026.19(e)(4)(i), § 1026.19(e)(3)(iv)(D) 

requires the creditor to provide a revised 

version of the disclosures required under 

§ 1026.19(e)(1)(i) no later than the next 

business day after the date the interest rate 

is locked. See comment 19(e)(3)(iv)(D)–1. 

* * * * * 

Subpart E—Special Rules for Certain Home 

Mortgage Transactions 

* * * * * 

Section 1026.37—Content of Disclosures for 

Certain Mortgage Transactions (Loan 

Estimate) 

* * * * * 

37(b) Loan terms. 

* * * * * 

37(b)(6) Adjustments after consummation. 

1. Periods not in whole years. For guidance 

on how to disclose increases after 

consummation that occur after a number of 

months less than 24 but that do not equate 

to a number of whole years or within a 

number of days less than a week, see the 

guidance provided in comment 37(a)(10)–3. 

For all other increases that occur after more 

than 24 months, see the guidance provided 

in comment 37(b)(8)–1. 

* * * * * 

37(c) Projected payments. 

* * * * * 

37(c)(2) Itemization. 

* * * * * 

Paragraph 37(c)(2)(ii). 

* * * * * 

2. Relationship to principal and interest 

disclosure. The creditor discloses mortgage 

insurance premiums pursuant to 

§ 1026.37(c)(2)(ii) on the same periodic basis 

that payments for principal and interest are 

disclosed pursuant to § 1026.37(c)(2)(i), even 

if mortgage insurance premiums are actually 

paid on some other periodic basis. 

Paragraph 37(c)(2)(iii). 

1. Escrow disclosure. The disclosure 

described in § 1026.37(c)(2)(iii) is required 

only if the creditor will establish an escrow 

account for the payment of some or all of the 

charges described in § 1026.37(c)(4)(ii). If no 

escrow account for the payment of some or 

all such charges will be established, the 

creditor discloses the escrow amount as ‘‘0.’’ 

If an escrow account is established for the 

payment of amounts described in 

§ 1026.37(c)(4)(ii), but no escrow payment is 

required with a particular periodic payment 

(such as with a final balloon payment) or 

range of payments, the escrow payment 

should be disclosed as ‘‘—’’. 

* * * * * 

37(c)(4) Taxes, insurance, and 

assessments. 

* * * * * 

Paragraph 37(c)(4)(iv). 

* * * * * 

2. Amounts paid by the creditor using 

escrow account funds. Section 

1026.37(c)(4)(iv) requires the creditor to 

disclose an indication of whether the 

amounts disclosed pursuant to 

§ 1026.37(c)(4)(ii) will be paid by the creditor 

using escrow account funds. If the amount 

disclosed pursuant to § 1026.37(c)(4)(ii) 

requires the creditor to disclose a description 

of more than one amount and only some of 

those amounts will be paid by the creditor 

using escrow account funds, the creditor may 

indicate that only some of those amounts will 

be paid using escrow account funds, such as 

by using the word ‘‘some.’’ 

* * * * * 

37(h) Calculating cash to close. 

* * * * * 

37(h)(1)(ii) Closing costs financed. 

1. Calculating amount. The amount of 

closing costs financed disclosed under 

§ 1026.37(h)(1)(ii) is determined by 

subtracting the estimated total amount of 

payments to third parties not otherwise 

disclosed pursuant to § 1026.37(f) and 

§ 1026.37(g) from the total loan amount 

disclosed pursuant to § 1026.37(b)(1). If the 

result of the calculation is a positive number, 

that amount is disclosed as a negative 

number under § 1026.37(h)(1)(ii), but only to 

the extent that it does not exceed the total 

amount of closing costs disclosed under 

§ 1026.37(g)(6). If the result of the calculation 

is zero or negative, the amount of $0 is 

disclosed under § 1026.37(h)(1)(ii). 

* * * * * 

37(m) Other considerations. 

* * * * * 

37(m)(8) New construction loans. 

1. Clear and conspicuous statement 

regarding redisclosure for new construction 

loans. For new construction loans where the 

creditor reasonably expects the settlement 

date to be 60 days or more after the provision 

of the disclosures required under 

§ 1026.19(e)(1)(i), providing the statement, 

‘‘You may receive a revised Loan Estimate at 

least 60 days prior to consummation’’ under 

the master heading ‘‘Additional Information 

About This Loan’’ and under the heading 

‘‘Other Considerations’’ pursuant to 

§ 1026.37(m) satisfies the requirements set 

forth in § 1026.19(e)(3)(iv)(F) that the 

statement be made clearly and conspicuously 

on the disclosure. 

37(n) Signature statement. 

* * * * * 

2. Multiple consumers. If there is more 

than one consumer who will be obligated in 

the transaction, the first consumer signs as 

the applicant and each additional consumer 

signs as a co-applicant. If there is not enough 

space under the heading ‘‘Confirm Receipt’’ 

to provide signature lines for every consumer 

in the transaction, the creditor may add 

additional signature pages, as needed, at the 

end of the form for the remaining consumers’ 

signatures. However, the creditor is required 

to disclose the heading and statement 

required by § 1026.37(n)(1) on such 

additional pages. 

* * * * * 

Section 1026.38—Content of Disclosures for 

Certain Mortgage Transactions (Closing 

Disclosure) 

* * * * * 

38(a) General information. 

38(a)(3) Closing information. 

* * * * * 

38(a)(3)(vi) Property. 

* * * * * 

2. Multiple properties. Where more than 

one property secures the credit transaction, 

§ 1026.38(a)(3)(vi) requires disclosure of all 

property addresses. If the addresses of all 

properties securing the transaction do not fit 

in the space allocated on the Closing 

Disclosure, an additional page with the 

addresses of all real properties may be 

appended to the end of the form. 

* * * * * 

38(e) Alternative calculating cash to close 

table for transactions without a seller. 

* * * * * 

38(e)(1) Loan amount. 

Paragraph 38(e)(1)(iii)(A). 

1. Statements of increases or decreases. 

Section 1026.38(e)(1)(iii)(A) requires a 

statement of whether the amount increased 

or decreased from the estimated amount. For 

§ 1026.38(e)(1)(iii)(A), the statement, ‘‘This 

amount increased,’’ in which the word 

‘‘increased’’ is in boldface font and is 

replaced with the word ‘‘decreased’’ as 

applicable, complies with this provision. 

38(e)(2) Total closing costs. 

* * * * * 

Paragraph 38(e)(2)(iii)(A). 

* * * * * 

3. Statements regarding excess amount and 

any credit to the consumer. Section 

1026.38(e)(2)(iii)(A) requires statements that 

an increase in closing costs exceeds legal 

limits by the dollar amount of the excess and 

a statement directing the consumer to the 

disclosure of lender credits under 

§ 1026.38(h)(3) if a credit is provided under 

§ 1026.19(f)(2)(v). See form H–25(F) of 

appendix H to this part for examples of such 

statements. 

* * * * * 

Dated: October 9, 2014. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2014–24739 Filed 10–28–14; 8:45 am] 

BILLING CODE 4810–AM–P 


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