CFPB Issues TDP Waiver Template for Construction Loan Disclosures

The CFPB recently issued a Trial Disclosure Program (TDP) Waiver Template in response to the Independent Community Bankers of America’s (ICBA’s) application for alternative construction loan disclosures under the CFPB’s Policy to Encourage TDPs (TDP Policy).  WBK previously covered the CFPB’s TDP Policy here.

In its application, the ICBA proposed an alternative Loan Estimate (LE) and Closing Disclosure (CD) that, according to the ICBA, more fully discloses the various components of single-close construction-to-permanent loans so that consumers have a better understanding of those loan products.  The ICBA believes that community banks, which are the main suppliers of construction loan financing in many small towns and rural markets, will be more likely to offer such loans if they can use the alternative LE and CD.  WBK previously wrote about the ICBA application in greater detail here.

The CFPB will accept applications from entities for a TDP Waiver based on the TDP Waiver Template.  Applications should include the information specified in the TDP Policy and should state that the application is based on the TDP Waiver Template and that the entity wishes to conduct in-market testing of the trial versions of the alternative LE and CD.  If the CFPB grants an application for a TDP Waiver based on the TDP Waiver Template, it will provide the entity with a document entitled TDP Waiver Terms and Conditions.  Additionally, the Bureau will publish a TDP Waiver Order on the CFPB’s website and in the Federal Register.