“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” said CFPB Director Richard Cordray. “We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”
The rule was originally set to go into effect Aug. 1. It will require new rules that consolidate the TILA-RESPA forms, and is intended to allow consumers more time to go over the cost of their mortgage. Many in the mortgage industry, however, worried that implementation of the rule would lead to costly errors as originators and lenders settled into the new regulations.
The CFPB had already announced a “hold harmless” grace period
, during which the rule would not be enforced.
The Consumer Financial Protection Bureau has announced it will delay the effective date of the Know Before You Owe rule.