United States

CFPB revises mandatory consumer brochure and booklets


The Consumer Financial Protection Bureau (CFPB or the Bureau) announced the availability of a revised consumer information brochure and two booklets that lenders are required to provide to consumers under the Real Estate Settlement Practices Act (Regulation X) and the Truth in Lending Act (Regulation Z). These technical revisions were made to ensure that the publications conform to CFPB’s most recent rulemaking changes, which took effect in January 2014.

The revised publications include:

What You Should Know About Home Equity Lines of Credit (HELOC Brochure). Under Regulation Z, 12 CFR 1026.40(e), all lenders are required to provide certain disclosures and this publication (or a suitable substitute) when a consumer applies for a HELOC product. The revised brochure adds a reference to the requirement that lenders must provide borrowers with a list of housing counselors in their area, CFPB contact information and updates to other federal agency contact information. It also adds CFPB resources for consumers, including complaint submittal information and a link to the Bureau’s online ‘‘Ask CFPB’’ tool, which can help consumers find answers to questions about mortgages and other financial topics.

Consumer Handbook on Adjustable-Rate Mortgages (CHARM Booklet). Under Regulation Z, 12 CFR 1026.19(b)(1), this booklet (or a suitable substitute)  must be provided to consumers at the time they apply for an adjustable-rate mortgage or before they pay a nonrefundable fee -- whichever is earlier. The key CHARM booklet changes include the removal of references to certain fees and product types that are no longer permitted (such as prepayment penalties on adjustable-rate mortgages). It also adds information about the lender’s obligation to:

  • Consider a borrower’s ability to repay
  • Provide disclosure of interest rate adjustments
  • Ensure a borrower has received homeownership counseling before making a negative amortization loan

Finally, the booklet adds CFPB contact information and updates for other federal agency contact information.

Shopping for Your Home Loan, Settlement Cost Booklet (Settlement Cost Booklet). Under Regulation X, 12 CFR 1024.6, lenders are directed to provide this booklet to anyone who has submitted a written application for certain federal related mortgage loans (within three business days after receiving the application). In the updated booklet, the new servicing protections for consumers are outlined. More specifically the booklet spells out, among other items, the servicer’s obligations to:

  • Respond promptly to consumer information or error requests
  • Provide mortgage payoff statements and monthly billing information
  • Contact delinquent consumers regarding their options to avoid foreclosure

While the CFPB says lenders may exhaust their current supply of these publications, they must use the new versions when reprinting. To pre-order printed copies of these revised publications, go to http://bookstore.gpo.gov/agency/224.

See the Federal Register’s full notice on revisions to these consumer information publications at http://www.gpo.gov/fdsys/pkg/FR-2014-01-10/pdf/2014-00272.pdf

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Kelly Housh
Regulatory Compliance National Support
Minneapolis, MN


Ty Beasley
Regulatory Compliance National Leader
Dallas, TX