Elizabeth Warren, the Harvard professor who President Barack Obama asked to oversee the creation of the new Consumer Financial Protection Bureau, recently told a group of community bankers in Kentucky that the agency has worked up a few model mortgage forms that it will release for perusal in the coming weeks, according to a report from Bloomberg News. These forms are intended to be clearer for consumers, and ease their troubles understanding and discussing the terms of their home loan.
[Related Article: The CFPB and Congress’ Need for an Adult Conversation]
“We’ve come up with a couple of prototypes,” Warren said during the meeting in Louisville, according to the news agency. “In a few weeks, we’ll be ready to share those prototypes.”
In addition, Warren believes the new CFPB forms will make community banks more competitive with larger financial institutions, the report said. Because the forms would be standardized, they would also be less costly, allowing smaller banks to better compete due to their closer relationships with customers.
[Resource: Get your free Credit Report Card]
The stated goal of the CFPB is to remove some of the ambiguities between the lending industry and consumers in an effort to help the latter avoid costly agreements they did not fully understand. The new federal agency will gain full regulatory power over lenders in late July.