ALTA Urges CFPB to Improve Average-Charge Regulations
|June 5, 2012|
Taking advantage of the Consumer Financial Protection Bureau’s (CFPB) extension for public comment on the “Streamlining Inherited Regulations” notice, ALTA submitted a letter addressing average-charge pricing.
The letter to CFPB Director Richard Cordray states that average-charge pricing is one aspect of RESPA that is overly burdensome and in need of improvement. With the letter, ALTA submitted a white paper outlining a brief history of the development of average-charge pricing under the recently promulgated RESPA rule. It also provides suggested improvements that would foster certainty and allow settlement service providers to use average-charge pricing.
Average-charge pricing allows settlement service providers to charge consumers an average charge for a particular service performed by an outside contractor, rather than requiring them to match each contractor’s specific invoice with each transaction. An average charge may not be used for transfer taxes, interest charges, reserves or escrow, or any type of insurance, including title, mortgage or hazard.
ALTA suggests CFPB amend the RESPA rule by making minor adjustments to the current working governing average charge. The letter said amended wording will improve the calculation process and foster increased use of such charges, which will result in reduced costs for settlement service providers and more certainty for consumers that they are not being overcharged for third-party fees.
For more information, contact ALTA Legislative and Regulatory Counsel Steve Gottheim.