3170-0015 (Reg Z) RIN AA19 Final Rule

RIN 3170-AA19 (Final Rule)

CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST – SUPPORTING STATEMENT
TRUTH IN LENDING ACT (REGULATION Z) 12 CFR 1026
(OMB CONTROL NUMBER: 3170-0015)
The Bureau of Consumer Financial Protection (CFPB) is providing a supplement to its previous
supporting statement for Regulation Z. This supplement addresses the information collection
requirements in Regulation Z that are affected by the CFPB’s changes as described below.
Terms of Clearance: N/A.
Abstract: Federal and state enforcement agencies and private litigants use records retained under the
requirement of Regulation Z to ascertain whether accurate and complete disclosures of the cost of credit
have been provided to consumers prior to consummation of the credit obligation and, in some instances,
during the loan term. The information is also used to determine whether other actions required under the
TILA, including complying with billing error resolution procedures and limitation of consumer liability
for unauthorized use of credit, have been met. The information retained provides the primary evidence
of law violations in TILA enforcement actions brought by federal agencies. Without the Regulation Z
recordkeeping requirement, the agencies' ability to enforce the TILA would be significantly impaired.
As noted above, consumers rely on the disclosures required by the TILA and Regulation Z to shop
among options and to facilitate informed credit decision making. Without this information, consumers
would be severely hindered in their ability to assess the true costs and terms of financing offered. Also,
without the special billing error information, consumers would be unable to detect and correct errors or
fraudulent charges on their open-end credit accounts. Additionally, enforcement agencies and private
litigants need the information in these disclosures to enforce the TILA and Regulation Z. See 15 U.S.C.
1607, 1640.

A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
The Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., was enacted to, among other things,
assure a meaningful disclosure of credit terms so that consumers will be able to compare credit terms
more readily and avoid the uninformed use of credit. Creditors are subject to disclosure and other
requirements that apply to open-end credit (e.g., revolving credit or credit lines) and closed-end credit
(e.g., installment financing). TILA imposes disclosure requirements on all types of creditors in
connection with consumer credit, including mortgage companies, finance companies, retailers, and credit
card issuers, to ensure that consumers are fully apprised of the terms of financing prior to consummation
of the transaction and, in some instances, during the loan term. Regulation Z was previously
implemented by the Board of Governors of the Federal Reserve System (Board) at 12 CFR 226. In light
of the general transfer of the Board’s rulemaking authority for TILA to the CFPB, the CFPB adopted an
interim final rule recodifying the Board’s Regulation Z at 12 CRF 1026. The CFPB enforces TILA as to
certain creditors and advertisers. TILA also contains a private right of action for consumers.
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Although Regulation Z has historically implemented provisions of TILA, the Dodd-Frank Act
amended TILA and the Real Estate Settlement Procedures Act (RESPA) to mandate specifically that the
CFPB establish a single, integrated disclosure (including real estate settlement cost statements) that
includes the disclosure requirements of TILA and RESPA for mortgage loan transactions subject to both
or either provisions of law. 15 U.S.C. 1604(a); 12 U.S.C. 2603(a). Required disclosures under RESPA
include a good faith estimate of settlement costs, a special information booklet, and an itemization of
settlement charges imposed upon the borrower and the seller. The implementing regulations for RESPA
have historically been published in HUD’s Regulation X at 24 CFR 3500, which the CFPB recodified at
12 CFR 1024.
Through a final rule issued in November 2013, the CFPB is amending Regulation Z to implement
certain provisions of RESPA that relate to the integrated disclosures, as well as the integration
requirements and certain other disclosure requirements under the Dodd-Frank Act. The CFPB enforces
RESPA as to certain lenders, mortgage brokers, and settlement agents. As set forth more fully below, the
CFPB believes the following aspects of the final rule are information collection requirements under the
PRA. 1
Disclosure – Loan Estimate and Closing Disclosure
The CFPB is implementing in Regulation Z certain additional disclosures derived from the
following statutory provisions under TILA, as amended by the Dodd-Frank Act, in 12 CFR 1026.19,
1026.20, 1026.37, 1026.38, and 1026.39: 15 U.S.C. 1638(a)(16) through (a)(19), 1638(b)(4),
1639c(g)(2), (g)(3), and (h), and 1639d(h) and (j). In addition, the CFPB is implementing in Regulation
Z certain disclosures derived from the following statutory provisions under RESPA in 12 CFR 1026.19,
1026.37, and 1026.38: 12 U.S.C. 2603 and 2604. Specifically, the final rule requires disclosures be
provided to consumers within three business days after receipt of the consumer’s mortgage loan
application (the Loan Estimate), to replace the “early” TILA disclosure and the RESPA good faith
estimate of settlement costs, and requires disclosures by received by consumers at least three business
days prior to consummation (the Closing Disclosure), to replace the “final” TILA disclosure and RESPA
settlement statement.
The final rule requires the development, implementation, and continuing use of new, integrated
Loan Estimate forms required for closed-end mortgage transactions subject to the final rule and the
generation and provision of additional Loan Estimates in particular transactions as a result of increases in
the closing costs that were included in the initial Loan Estimate. 2 In addition, the final rule requires the
1

Under the final rule, these information collection requirements apply to closed-end transactions secured by real property,
other than reverse mortgages subject to § 1026.33. Construction-only loans, vacant-land loans, and loans secured by more
than 25 acres are subject to the integrated disclosure provisions although these transactions were previously exempt from
RESPA coverage, because the CFPB believes that excluding these transactions would deprive consumers of the benefit of
enhanced disclosures. However, the CFPB believes that the number of such transactions is negligible as compared to the
entire mortgage market.
2
The final rule also provides that, if the creditor permits a consumer to shop for a settlement service, the creditor shall provide
the consumer with a written list identifying available providers of that service and stating that the consumer may choose a
different provider for that service. Accordingly, creditors must comply with this additional requirement in certain transactions

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development, implementation, and continuing use of new, integrated Closing Disclosure forms for
closed-end mortgage transactions subject to the final rule and generation and provision of additional
Closing Disclosures in particular transactions as a result of certain significant changes between the time
the Closing Disclosure form is given and the closing.
Under the final rule, the integrated disclosures described above will serve as model forms for
transactions subject to TILA, and standard forms for transactions subject to both TILA and RESPA.
Disclosure – Post-Consummation Disclosures
In addition to the integrated disclosures, the CFPB is also implementing two post-consummation
disclosures. The first, the Post-Consummation Escrow Cancellation Notice, was proposed by the Board
in their 2011 Escrows Proposal, 76 FR 11598 (Mar. 2, 2011). Subsequent to the issuance of the Board’s
2011 Escrows proposal, the authority for finalizing the proposal transferred to the Bureau pursuant to the
Dodd-Frank Act. In this final rule, the Bureau has adopted 12 CFR 1026.20(e) to implement the PostConsummation Escrow Cancellation Disclosure generally as proposed in the Board’s 2011 Escrow
Proposal. The second, the post-consummation Partial Payment Policy disclosure, was proposed by the
Bureau in this rule’s related proposal. While it was included as part of the integrated disclosure
requirements, the CFPB has decided to separate it here for the sake of completeness and transparency as
the timing of both of the disclosures occur post consummation.
Recordkeeping
The CFPB is finalizing 12 CFR 1026.25(c), which contains record retention requirements related
to the integrated disclosures required by in this final rule. Generally, that provision requires creditors to
retain evidence of compliance with the integrated disclosure provisions of Regulation Z for three years
after consummation of the transaction, except that the creditor must retain copies of the Closing
Disclosure for five years after consummation (see #7, below). The Post-Consummation Escrow
Cancellation Notice and the Partial Payment Policy disclosure are subject to the general two year
requirement under Regulation Z.
2. Use of the Information
The third party disclosures and recordkeeping requirements in this collection are required by
statute and regulation, as explained above. Consumers rely on the disclosures required by TILA and
Regulation Z to shop among options and to facilitate informed credit decision making. Without this
information, consumers would be hindered in their ability to assess the true costs and terms of financing
offered. Additionally, enforcement agencies and private litigants need the information in these
disclosures to enforce TILA and Regulation Z. See 15 U.S.C. 1607, 1640. Under the final rule,
consumers would also rely on the disclosures required by Regulation Z to understand their estimated
where consumers are permitted to shop for settlement services. This is an existing requirement under current Regulation X,
12 CFR 1024 app. C, but is not specifically itemized as a separate information collection under Regulation X. Because the
timing of this requirement coincides with the provision of the initial Loan Estimate to consumers, the burden associated with
the written list of providers requirement under the final rule is included in the burden calculation for the Loan Estimate.

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and final settlement costs.
3. Use of Information Technology
Regulation Z contains rules to establish uniform standards for using electronic communication to
deliver disclosures required under Regulation Z, within the context of the Electronic Signatures in Global
and National Commerce Act (ESIGN), 15 U.S.C. 7001 et seq. 12 CFR 1026.5(a)(1)(iii), 1026.17(a)(1).
These rules enable businesses to utilize electronic disclosures and compliance, consistent with the
requirements of ESIGN. Use of such electronic communications is also consistent with the Government
Paperwork Elimination Act (GPEA), Title XVII of Pub. L. 105-277, codified at 44 U.S.C. 3504, note.
ESIGN and GPEA serve to reduce businesses’ compliance burden related to Federal requirements,
including Regulation Z, by enabling businesses to use more efficient electronic media for disclosures and
compliance.
Regulation Z also permits creditors to retain records using any method that reproduces records
accurately, including computer programs. Creditors need only retain enough information to reconstruct
the required disclosure or other records. Comment 25(a)-2.
4. Efforts to Identify Duplication
The recordkeeping requirement of Regulation Z being implemented in the final rule preserves the
information used by the creditor in making disclosures (and underlying calculations) of the terms of
consumer credit and other required actions. The creditor is the only source of this information. No other
Federal law mandates this requirement. No State law known to the CFPB imposes these requirements,
although some States may have other rules applicable to consumer credit transactions.
Similarly, the disclosures required by TILA and Regulation Z are not otherwise required, except
as noted below with respect to RESPA and Regulation X. Although some credit cost information is
contained in contractual documents, the information is not standardized. As a result, consumers cannot
use them efficiently to shop or to appreciate fully the credit terms they are considering. The creditor is
the only source of this information. No other Federal law mandates these disclosures other than as noted
below. State laws do not duplicate these requirements, although some States may have other rules
applicable to consumer credit transactions.
As noted above, the CFPB is implementing in Regulation Z certain disclosure requirements under
TILA and RESPA to reduce the number of overlapping disclosures that consumers currently receive
under those two statutes.
5. Efforts to Minimize Burdens on Small Entities
TILA and Regulation Z disclosure requirements are imposed on all creditors. The disclosure
requirements are mandated jointly by TILA and Regulation Z. In this final rule, the CFPB is issuing
additional disclosure requirements mandated by RESPA and the Dodd-Frank Act.
Most lenders today use some degree of computerization in their business, and Regulation Z
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permits businesses to rely on computer support, among other alternatives, to meet their disclosure
requirements. This flexibility yields reduced disclosure costs. (See #3 above.)
Moreover, as noted previously, Regulation Z provides model forms and clauses that may be used
in compliance with its requirements. Correct use of these forms and clauses insulates a creditor from
liability as to proper format. The CFPB has determined that the integrated disclosures serve as model
forms for transactions subject to TILA, and standard forms for transactions subject to both TILA and
RESPA.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
The current record retention period of two years under Regulation Z supports private actions and
regulatory enforcement actions. If the retention period were shortened, consumers who sue under TILA,
and the administrative agencies, might find that creditor records needed to prove violations of TILA no
longer exist.
The CFPB has decided to require creditors to retain evidence of compliance with the integrated
disclosure provisions of Regulation Z for three years after consummation of the transaction, except that
creditors must retain the Closing Disclosure and all documents related to the Closing Disclosure for five
years after consummation (see #7, below). Creditors must retain evidence of compliance with the PostConsummation Escrow Cancelation Notice and the post-consummation Partial Payment Policy
disclosure for two years in accordance with the current record retention period for Regulation Z.
As noted, the disclosure requirements are needed to facilitate comparison cost shopping and to
spur informed credit decision making. Without these requirements, consumers may not have access to
this critical information, may not receive it in a timely fashion, or may not receive it in an easilyunderstandable manner. Their right to sue under TILA would be undermined, and enforcement agencies
could not fulfill their mandate to enforce TILA and RESPA.
7. Circumstances Requiring Special Information Collection
The final rule adopts a retention requirement of five years after consummation for the Closing
Disclosure and all documents related to the Closing Disclosure, consistent with the requirements of
existing Regulation X. While § 1026.25 of Regulation Z generally requires creditors to retain evidence
of compliance with TILA for two years after the date disclosures are required to be made or action is
required to be taken, current Regulation X (12 CFR 1024.10(e)) requires lenders to retain each completed
RESPA settlement statement and related documents for five years after settlement, unless the lender
disposes of its interest in the mortgage and does not service the mortgage. If the lender disposes of its
interest and does not service the mortgage, current Regulation X requires the lender to provide the
lender’s copy of the RESPA settlement statement to the owner or servicer of the mortgage as part of the
transfer of the loan file. The owner or servicer to whom the files are transferred must retain the RESPA
settlement statement for the remainder of the five-year period.
The CFPB is implementing a retention requirement of five years after consummation because the
Closing Disclosure serves an important purpose as both the record of all fees associated with the
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transaction and as part of the official disbursement record and may be needed for five years after the
transaction. For example, State and local laws related to transactions involving real property may depend
on the information being available for five years. Additionally, the current five-year recordkeeping
requirement under Regulation X has been in effect since 1992. 3 The CFPB is unaware of any problems
caused by the five year requirement under current Regulation X and does not believe the time period
should be shortened without evidence that the rule is not operating as intended, is unnecessary, or
otherwise harms consumers. Thus, it appears that requiring creditors to retain copies of the Closing
Disclosure for five years is appropriate. The CFPB believes that this requirement will ensure that records
associated with the integrated disclosures are kept long enough to facilitate compliance with both TILA
and RESPA and will also enable accurate supervision.
The final rule also requires that if a creditor sells, transfers, or otherwise disposes of its interest in
a mortgage and does not service the mortgage, the creditor shall provide a copy of the Closing Disclosure
to the owner or servicer of the mortgage as a part of the transfer of the loan file. Both the creditor and
such owner or servicer shall retain such disclosures for the remainder of the five-year period. The CFPB
recognizes that this requirement is different from the current requirements under Regulation X, which do
not require a creditor to maintain these documents if the creditor disposes of its interest in the mortgage
loan and does not service the mortgage loan. However, the CFPB believes that the current rule provides
little practical benefit to creditors, because other provisions of Regulations Z and X require creditors to
maintain records of compliance for several years, even if the creditor transfers, sells, or otherwise
disposes of its interest in the mortgage loan.
The recordkeeping and disclosure requirements contained in Regulation X are otherwise
consistent with 5 CFR 1320.8(d)(2).
8. Consultation Outside the Agency
In August 2012, the CFPB published a notice of proposed rulemaking in the Federal Register for
public comment. The comment period with respect to the PRA analysis ended on November 6, 2012. In
response to this request for comments, the CFPB did not receive comments related to the PRA analysis
contained in the proposed rule or comments containing specific cost estimates addressing the CFPB’s
PRA analysis. Prior to issuing the proposed rule and before issuing the final rule, the CFPB consulted
with other Federal agencies consistent with section 1022 of the Dodd-Frank Act and consulted with
affected small entities through a Small Business Review Panel convened under Small Business
Regulatory Enforcement Fairness Act. The CFPB also consulted with other stakeholders, including
roundtables with industry representatives and consumer advocacy groups.
9. Payments or Gifts to Respondents
Not applicable.

3

57 FR 49600, 49607 (Nov. 2, 1992).

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10. Assurances of Confidentiality
There are no assurances of confidentiality provided to respondents.
11. Justification for Sensitive Questions
The CFPB through this collection does not ask any questions of respondents therefore there are
no questions of a sensitive nature being asked.
12. Estimated Burden of Information Collection
Under the final rule, the CFPB accounts for the paperwork burden associated with Regulation Z
for the following respondents pursuant to its administrative enforcement authority: insured depository
institutions with more than $10 billion in total assets, their depository institution affiliates, and certain
nondepository institutions. The CFPB estimates it has 2,922 total respondents (128 depository
institutions and affiliates and 2,515 nondepository institutions).4 The CFPB and the FTC generally have
joint enforcement authority over nondepository institutions. To prevent double-counting the same
population, the CFPB has allocated to itself half of the estimated burden to nondepository institutions.
The CFPB calculates labor costs by applying appropriate hourly cost figures to the burden hours
described below. The hourly rates used are based on Bureau of Labor Statistics data for depository and
nondepository credit intermediators. To obtain fully-loaded hourly rates, the CFPB divides hourly wages
by 66.6%. 5 The fully-loaded hourly labor cost by occupation is given below.

Table 1: Occupational Categories and Hourly Rates

Currently Regulation Z’s approved information collections and the CFPB’s share of their
associated burdens are as follows:

4

The CFPB has administrative enforcement authority over 154 depository institutions and depository affiliates. The CFPB
estimates that 26 of these entities did not originate any closed-end mortgages in 2010 and excludes these entities for the
purposes of this PRA analysis.
5
Bureau of Labor Statistics data indicate that in Q4 2010 wages accounted for 67.5% of the total cost of compensation for
credit intermediation and related activities.

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Table 2: Current Information Collection Burdens for Regulation Z

The CFPB’s estimates of the burden of these information collections remain unchanged. In
addition, this final rule adds the following information collections and estimates their burden as follows:
A. Loan Estimate and Closing Disclosure
The integrated Loan Estimate and the Closing Disclosure will result in certain one-time and
ongoing costs to covered persons. The CFPB believes that many of the costs of complying with these
requirements will be common across the two disclosures, and therefore discusses them together here. For
purposes of the PRA, the one-time burdens are allocated equally across the Loan Estimate and the
Closing Disclosure.
Under the final rule, responsibility for delivering the Loan Estimate will lie with the creditor. The
CFPB believes that in some circumstances the Loan Estimate may be delivered by a mortgage broker
acting on behalf of the creditor, as is currently the case with the RESPA GFE. In addition, the creditor
would be solely responsible for providing the Closing Disclosure to the consumer, but either the
settlement agent or the creditor could provide the Closing Disclosure. Although respondents under PRA
for Regulation Z also include mortgage brokers and settlement agents, for purposes of the PRA analysis,
the CFPB assumes that the creditor takes on the obligation to deliver the Loan Estimate and the Closing
Disclosure. Accordingly, there is minimal burden attributed to brokers and settlement agents.
i. One-time burden
Reviewing the regulation
The CFPB estimates that, for each covered person, two compliance officers would spend 30 hours
each learning about the regulation and developing training material. The burden allocated to the CFPB
for depository and nondepository institutions is therefore 92,000 hours. Based on the labor cost of
compliance officers, the cost for compliance officers is roughly $4.7 million.
Training
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Covered persons will incur one-time costs associated with training employees to use new forms
and any new compliance software and systems. The CFPB estimates that each loan officer or other loan
originator will need to receive eight hours of training, and that one trainer could train ten loan officers at
a time, for an additional one hour of trainer time per ten hours of loan officer trainee time. In addition,
for each loan officer trained, there are 0.67 back office staff trained. The CFPB estimates that there are
approximately 31,000 loan officers at the depository institutions under the CFPB’s jurisdiction and
24,000 at nondepository institutions that would need training. Based on the CFPB’s allocation of 43,000
trainees, the time for trainers and trainees is (43,000*1.77*8) =595,000 hours. Based on the respective
labor cost of loan officers and trainers, the associated labor cost is roughly $23.8 million.
Software and information technology
Covered persons 6 who maintain their own software and compliance systems would incur onetime costs to adapt their software and compliance systems to produce the new forms. 7 Based on
information provided by creditors and by software vendors, the CFPB believes that 5 percent of creditors
typically maintain their own systems, while 95 percent of creditors rely on vendors.
The use of vendors would substantially mitigate the costs of revising software and compliance
systems, as the efforts of a single vendor would address the needs of a large number of creditors. Based
on discussions with a leading origination technology provider, the CFPB believes that these updates,
however, will likely be included in regular annual updates, and therefore the costs will not be directly
passed on to the client creditors. Based on small entities that participated in the Small Business Review
Panel process, the CFPB estimates that creditors that maintain their own compliance software and
systems will incur costs of roughly $100,000 to determine what changes need to be made and to update
their systems to comply with the proposal.
The total cost to covered persons who maintain their own systems is roughly $14.6 million. 8
Dividing the total cost by the labor cost for software and IT staff yields an estimate of 265,000 hours.

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For the reasons discussed above, the CFPB is assuming that the creditor will bear the costs of revising software and
compliance systems for purposes of this analysis. If, instead, settlement agents bore those costs with respect to the Closing
Disclosure, the costs would likely be similar although borne by different parties. Two major vendors currently provide
software services to the vast majority of small mortgage originators to produce the RESPA GFE and initial TILA disclosures.
RESPA settlement statements are currently issued by settlement agents using software provided by a different, but similarly
small, set of vendors; however, the CFPB understands that the originators’ systems are capable of producing the RESPA
settlement statements. As a result, the CFPB believes that it is reasonable to measure costs assuming that the originators’
vendors will provide both the Loan Estimate and the Closing Disclosure to their clients under existing contracts. Were the
current software providers for settlement agents to have to update their systems (under the second alternative or under other
contractual arrangements), those vendors would have to incur the stated costs.
7
In addition to changing the format of the required forms, the new forms include numerous new disclosures that are required
by the Dodd-Frank Act. The CFPB believes that this additional information would be added to the forms as part of the
process of adapting software and compliance systems to produce the new forms, and therefore does not provide separate
estimates for the costs of adding this additional information.
8
The CFPB assumes burden for 18 of the top 20 respondents and 68 additional respondents. The total cost is therefore
(18*$2,000,000)+(68*$100,000)=$42,800,000.

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ii. Ongoing burden
Covered persons will have ongoing costs from providing the disclosures. Based on industry
feedback, the CFPB understands that most disclosures will be generated by automated systems that use
data collected by covered entities in the normal course of business. The CFPB believes that a small
number of the disclosures in the Loan Estimate and Closing Disclosure will be generated using data that
may not otherwise be collected in the normal course of business, and has considered this in calculating
the ongoing burden associated with the information collection. The CFPB’s estimates also account for
the time covered persons will spend to review the forms for accuracy. The CFPB therefore estimates
that providing a Loan Estimate will take approximately 3 minutes and providing a Closing Disclosure
will take approximately 6 minutes. However, the CFPB may adjust its calculation in a final rule if it
determines that such information is collected or reviewed for accuracy in the normal course of business
or that automated sources of such data exist that would make any burden associated with collecting that
data negligible.

In calculating the total burden of providing Loan Estimates and Closing Disclosures, the CFPB
assumes that Loan Estimates will be provided in response to applications for mortgages and Closing
Disclosures will be provided three business days before mortgages are consummated. The CFPB further
estimates entities will reissue on average two Loan Estimates per loan originated.
B. Implementation of Certain New Disclosures Mandated by the Dodd-Frank Act
Title XIV of the Dodd-Frank Act added new disclosure requirements to TILA and RESPA for
mortgage transactions, including the Post-Consummation Escrow Cancellation Notice for certain
mortgage transactions and the Partial Payment Policy disclosure for certain mortgage transactions.
Although the Dodd-Frank Act does not specifically require inclusion of all of these new disclosures in
the Loan Estimate and the Closing Disclosure, the CFPB is including some of these disclosures in the
integrated forms and also requiring the provision of the Post-Consummation Escrow Cancellation Notice
and the Partial Payment Policy disclosure for certain mortgage transactions because doing so will benefit
consumers and reduce burden on covered persons. Disclosure of this information would ensure that
consumers have the facts to understand a key aspect of their mortgage loan and avoid the uninformed use
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of credit. The CFPB also believes that the disclosure of this information ensures that the features of the
mortgage transaction, both initially and over the term of the transaction, are fully, accurately, and
effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits,
and risks associated with the mortgage transaction, in light of the facts and circumstances, and improves
consumer awareness and understanding of residential mortgage loans. If these additional requirements
were implemented separately, the aggregated cost of the multiple rules may have been greater than the
cost of this final rule. Because creditors will be updating software and compliance systems for these two
disclosures at the same time as and in conjunction with the updating for the Loan Estimate and the
Closing Disclosure, the disclosures should be relatively easy to implement and the additional costs are
likely to be minimal.
i. One-time burden
Because covered persons already have to revamp their origination process due to the newly
integrated TILA and RESPA disclosures, the CFPB does not believe that the Post-Consummation
Escrow Cancellation Notice and the post-consummation Partial Payment Policy disclosure for certain
mortgages will impose additional costs to covered persons beyond those associated with reviewing the
regulation, training, and updating software and information technology. The CFPB does not anticipate
additional costs to covered persons as a result of the new disclosure requirements because covered
persons will be updating software and compliance systems for these two disclosures at the same time as
and in conjunction with the updating for the Loan Estimate and the Closing Disclosure, so modifying
systems to perform these calculations and training existing employees on the new concepts will be a onetime lift.
ii. Ongoing burden
Covered persons may incur additional recurring costs associated with calculating and disclosing this
additional information to consumers once the implementing rules take effect. The CFPB believes that
any burden associated with the final rule’s Post-Consummation Escrow Cancellation Notice and the postconsummation Partial Payment Policy disclosure requirements will be minimal or de minimis beyond
presentation of the information, which will be ongoing.
C. Recordkeeping
The integrated Loan Estimate and the Closing Disclosure will result in certain one-time and
ongoing costs to covered persons. The CFPB believes that many of the costs of complying with these
requirements will be common across the two disclosures, and therefore discusses them together here. For
purposes of the PRA, the one-time burdens are allocated equally across the Loan Estimate and the
Closing Disclosure.
The current record retention period of two years under Regulation Z supports private actions and
regulatory enforcement actions. However, the CFPB has decided to require creditors to retain evidence
of compliance with the integrated disclosure provisions of Regulation Z for three years after
consummation of the transaction, except that creditors must retain the Closing Disclosure and all
documents related to the Closing Disclosure for five years after consummation, consistent with the
11

requirements of existing Regulation X (see #7, above). The final rule also requires that if a creditor sells,
transfers, or otherwise disposes of its interest in a mortgage and does not service the mortgage, the
creditor shall provide a copy of the Closing Disclosure to the owner or servicer of the mortgage as a part
of the transfer of the loan file. Such owner or servicer shall retain such disclosures for the remainder of
the five-year period. The CFPB recognizes that this requirement is different from the current
requirements under Regulation X, which does not require a creditor to maintain these documents if the
creditor disposes of its interest in the mortgage loan and does not service the mortgage loan (see #7,
above). The CFPB believes that any burden associated with the final rule’s recordkeeping requirement
will be minimal or de minimis, since only information sufficient to reconstruct the required record is
required to be retained.
The final rule does not finalize the integrated recordkeeping requirements proposed in the
proposed rule.
i. One-time burden
The CFPB does not believe that the recordkeeping requirement will impose one-time costs on
covered persons beyond reviewing the regulation.
ii. Ongoing burden
Covered persons will have ongoing costs from complying with the new record retention
requirements. The CFPB believes that any burden associated with the final rule’s record keeping
requirement will be minimal or de minimis, since only information sufficient to reconstruct the required
record is required to be retained.
D. Summary
The ongoing and one-time hourly costs for each information collection are listed below.

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13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
Covered persons will incur costs associated with producing and mailing the Loan
Estimate and Closing Disclosure. The CFPB estimates the cost per disclosure is approximately
$0.80 per Loan Estimate and $0.95 per Closing Disclosure, including postage. 9 The CFPB
estimates that approximately half of the disclosures will be provided electronically and
therefore will incur no cost beyond the labor costs described in #12, above. The production
and mailing costs are roughly $7.1 million for the Loan Estimate and $2.3 million for the
Closing Disclosure. 10
14. Estimated Cost to the Federal Government
As the CFPB does not collect any information, the cost to the CFPB is negligible.
15. Program Changes or Adjustments

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The CFPB estimates that the cost of a Loan Estimate is typically $0.75 and that the written list identifying available service
providers would add an additional $0.10 to the initial Loan Estimate. The CFPB estimates there will be 8.3 million initial
Loan Estimates and 9.6 million Loan Estimate redisclosures annually. Therefore, the cost of producing and distributing the
Loan Estimate is (8,300,000*$0.85*0.5)+(9,600,000*$0.75*0.5)= $7,100,000 (rounded to the nearest $100,000).
10
The cost of producing and distributing for the Closing Disclosure is 4,800,000*$0.95*0.5=$2,300,000 (rounded to the
nearest $100,000).

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As noted above, the Dodd-Frank Act amended TILA and RESPA to, among other things,
mandate specifically that the CFPB establish a single, integrated disclosure (including real estate
settlement cost statements) that includes the disclosure requirements of TILA and RESPA for mortgage
loan transactions subject to both or either provisions of law. 15 U.S.C. 1604(a); 12 U.S.C. 2603(a).
Accordingly, the CFPB is implementing the Loan Estimate and Closing Disclosure requirements in
Regulation Z to replace the “early” TILA disclosure and RESPA GFE and the “final” TILA disclosure
and RESPA settlement statement. The integrated disclosures under the final rule will apply to all closedend transactions secured by real property or a dwelling, other than reverse mortgage transactions. The
CFPB is also implementing in Regulation Z certain additional disclosures derived from statutory
provisions under TILA and RESPA, as amended by the Dodd-Frank Act.
In addition, as previously discussed, the CFPB is requiring record retention related to the
integrated TILA and RESPA disclosures and the post-consummation disclosures. Generally, the CFPB
is requiring creditors to retain evidence of compliance with the integrated disclosure provisions of
Regulation Z for three years after consummation of the transaction, except that the creditor must retain
copies of the Closing Disclosure, and all documents related to that disclosure, for five years after
consummation. For the two post-consummation disclosures, the CFPB is requiring creditors to retain
evidence of compliance for two years.
The CFPB previously estimated the ongoing burden for Regulation Z based on the assumption
that the total ongoing burden for the regulation, across all agencies, remained the same as it was before
the regulation was restated by the CFPB. The CFPB used its own methodology to estimate the one-time
and ongoing burden for the information collections that are affected by the final rule, which may differ
from the methodologies employed by other agencies.
The CFPB makes no changes to the other information collections associated with Regulation Z
since their last OMB approval. A summary of the burden changes is provided below in Table 5.
Table 5: Summary of Burden Changes Resulting from Final Rule for Regulation Z
Type of Burden
Annual Number of Responses
Annual Time Burden (Hr)
Annual Cost Burden ($)

Requested

Program Change Due
to Agency Discretion

Previously
Approved

216,724,041

216,724,041

201,389,041

10,055,000

10,055,000

6,467,000

9,400,000

9,400,000

6,467,000

Difference
15,335,000
3,588,000
2,933,000

While this final rule results in approximately 3.6 new burden hours for Regulation Z (OMB No.
3170-0015), certain disclosure requirements from Regulation X resulting in a reduction of
approximately10.8 million hours from OMB control number 3170-0016. Therefore, the overall net
burden change resulting from this final rule is a reduction of 7.2 million hours.

16. Plans for Tabulation, Statistical Analysis, and Publication
The information collections are third-party disclosures and record retention requirements. There
is no publication of the information.
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17. Display of Expiration Date
The CFPB believes that displaying the OMB expiration date is inappropriate because it could
cause confusion by leading consumers to believe that the regulation sunsets as of the expiration date.
Consumers are not likely to be aware that the CFPB intends to request renewal of OMB approval and
obtain a new expiration date before the old one expires. Further, there are no collection instruments on
which to display an expiration date. The expiration will, however, be displayed on OMB’s public-facing
docket on reginfo.gov (http://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=31700015).
18. Exceptions to the Certification Requirement
The CFPB certifies the this collection of information is consistent with the requirements of 5 CFR
1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an exemption to the
certification requirements.

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