By Doug Cameron
Wall Street Journal
The new U.S. consumer finance watchdog will next month start testing a new version of the standard mortgage disclosure form, the academic overseeing the agency’s creation said Monday.
The planned revamp of the Real Estate Settlement Procedures Act, or RESPA, form was a key priority of the Consumer Financial Protection Bureau, ranking ahead of improved disclosure for credit card products.
“In May, we will be looking at our first [mortgage form] prototypes,” Elizabeth Warren told Dow Jones Newswires on the sidelines of a banking conference in Louisville, Ky. The agency has been consulting with banks on the format and content of the RESPA revamp for a number of months.
Formal rule-writing will not start until after its launch on July 21. Warren provided few other details of the agency’s rule-writing initiatives beyond mortgages and credit cards.
“The much bigger part of what we do will be supervision and enforcement,” she said. She said ramping up the agency’s oversight of thousands of non-bank financial institutions “would be a long slope.”
Warren, the White House adviser tasked with preparing the new agency for its launch, also said the proposal contained in the 2011 federal budget for the agency’s finances to be scrutinized via audit didn’t challenge its independence.
“I still feel comfortable with two audits,” she said.
The new agency’s remit and structure remains under intense scrutiny, and the White House has yet to nominate a director for the agency, created as part of the Dodd-Frank financial reforms.
She told bankers that the notion of the agency being overseen by a five-person panel of commissioners had been discussed last summer.
“The idea of going back to try and change that piece is just designed to throw sand in the gears,” she said. Critics concerned about regulatory overreach have called for the agency to be overseen by a bipartisan panel rather than a single director.