Group of professionals discuss finance

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Banking and Finance Law Daily, April 26, 2018

Know Before You Owe revised disclosure timing requirement amended

By Richard A. Roth, J.D.

The Consumer Financial Protection Bureau has amended Reg. Z—Truth In Lending (12 CFR Part 1026) to adjust the rule on when a mortgage lender may pass on increased closing costs to a mortgage loan borrower and disclose the higher costs on the Closing Disclosure. The amendment changes one aspect of the Bureau’s Know Before You Owe mortgage disclosure rule that took effect Oct. 3, 2015.

According to the Bureau, the rule as originally adopted could prevent a lender from disclosing an increased closing cost on the Closing Disclosure even when there was a valid reason for the increase, and even when the increase resulted from a change requested by the borrower. The effect of the amendment is to allow a lender to establish that an estimated closing cost was disclosed in good faith by comparing the cost to the Closing Disclosure rather than to the Loan Estimate.

The original rule created a "four-business day limit" on when increased costs could be disclosed using a revised Closing Disclosure. This limit applied if there were fewer than four days between when Reg. Z would require revised disclosures and the loan closing. The amendment removes this four-day restriction. Instead, the lender must provide the revised disclosures within three business days of learning that one of the permissible reasons for the revision applies.

The amendment will take effect 30 days after it is published in the Federal Register.

MainStory: TopStory BankingFinance CFPB ConsumerCredit FedTracker Mortgages TruthInLending

Back to Top

Banking and Finance Law Daily

Introducing Wolters Kluwer Banking and Finance Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.