The January 2013 issue of the Banking Law Journal includes an article by W&L Professor of Practice James Pannabecker entitled “The CFPB Issues an Exemption from Dodd-Frank Mortgage Disclosures, Leading the Industry to a Potential Regulatory Cliff.”
The article argues that the Consumer Financial Protection Bureau made a mistake in not issuing a detailed final rule by January 21, 2013 as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, doing a disservice to both the industry and consumers. Instead, the agency issued an exemption for twelve disclosure requirements it intends to address in a final rule later in 2013. The agency took this action despite a Dodd-Frank provision stating that its mortgage requirements, including the twelve disclosures, would automatically take effect on January 21 if regulations were not adopted by that date. The CFPB could have excised from previous proposals the rules for each of the twelve disclosures and issued them in final form before January 21, then later adjusted the compliance date if appropriate. Its admittedly temporary exemption relies on regulatory flexibility options and invites litigation. The article offers disclosure language for lenders that choose to implement the twelve disclosures despite the CFPB exemption. Download: 130 Banking Law Journal 37 (January 2013).