This article focuses on the Independent Community Bankers of America (ICBA) and their affiliates in urging the Consumer Financial Protection Bureau (CFPB) to provide clearer guidance and improve disclosure requirements for construction loan agreements to ensure consumers are taken care of. Construction loans provide funds to those building businesses, homes, and other projects, but the current disclosure requirements by the CFPB are not clear enough, with some lenders not aware of the exact language they need to include in the agreements.

The ICBA and their affiliates are therefore asking the CFPB to provide explicit guidance as to which disclosures should be included in the loan agreements and ensure that consumers understand their rights involved with the loan. This improved guidance should also include the Mortgage Act and its corresponding Good Faith Estimate, Truth in Lending Act, Home Mortgage Disclosure Act, and Real Estate Settlement Procedures Act. The ICBA affiliates believe that this improved guidance is particularly important for the small community banks, whose customers may not have the resources to deal with interest rate changes related to the loan.

Additionally, the ICBA and their affiliates also suggest that the CFPB include an improved method for customers to submit complaints and resolve disputes related to construction loans. They seek a streamlined process and improved communication between lenders and customers to avoid future issues from arising, and to better address any that have already taken place.

Finally, ICBA and its affiliates call on the CFPB to provide better training and recorded webinars to members of the construction industry, lenders, and their customers. This education process is needed to ensure that all parties understand the lending process and their rights and protections under the law. With proper training and more explicit guidance, the ICBA believes that consumers can be more confidently take part in the construction loan process and be better protected by the law.

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