More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
The Consumer Financial Protection Bureau (CFPB) announced on Wednesday that it will combine two federally required mortgage disclosures into a “single, simpler form that makes the costs and risks of the loan clear” and allows consumers to comparison shop for the best offer.
The CFPB says that it will begin testing the two “alternate prototype forms” through its Know Before You Owe project on May 19. The two forms are designed to be given to consumers who have just applied for a mortgage loan, the CFPB says, and the “testing--which will take place over the next several months and involve one-on-one interviews with consumers, lenders, and brokers--will precede and inform the CFPB’s formal rulemaking process.” The CFPB says it has also posted the prototypes on its web site with an interactive tool to gather public input about the designs.
“Buying a home is one of the biggest financial decisions most Americans will ever make. The Know Before You Owe project is about giving consumers upfront, easy-to-understand information that helps them compare different mortgage offers and find the one that’s best for them,” said Elizabeth Warren (above), Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB, in a statement.
“The current forms can be complicated and difficult for consumers to use. They are also redundant and can be costly for lenders to fill out. With a clear, simple form, consumers will be in a better position to answer two basic questions: Can I afford this mortgage and can I get a better deal somewhere else?,” Warren added.