More On Legal & Compliancefrom The Advisor's Professional Library
- Scope of the Fiduciary Duty Owed by Investment Advisors A fiduciary obligation goes beyond the suitability standard typically owed by registered representatives of broker-dealer firms to clients. The relationship is built on the premise that the advisor will always do the right thing for the person or entity receiving advice.
- Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.
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.