The CFPB recently announced it has approved an application from the Independent Community Bankers of America (ICBA) to test alternative disclosures for construction loans, and more specifically, for single-close, construction-to-permanent loans.
The ICBA had applied to the CFPB for the ability to make some changes to how the Loan Estimate and Closing Disclosure look today for these types of loans. Its goal was to increase the availability of these loans and a borrower’s understanding of them. The CFPB’s approval allows for “real-world” testing of these disclosures by approved lenders. Lenders interested in being part of this testing need to first apply to the CFPB for permission. Additional details on what information is necessary to get this ball rolling for interested institutions are provided in the both CFPB’s announcement and in the Trial Disclosure Program Waiver Template.
Regardless of where this goes, this is a pretty good indication that the CFPB is interested in making some changes to construction loan disclosures. While this testing process could take some time, we hope it will lead to changes for better understanding…both for borrowers and financial institutions. Stay tuned!
Published
2023/11/30
