The Consumer Financial Protection Bureau (the “CFPB”) today announced a revised Consumer Handbook on Adjustable Rate Mortgages (“CHARM”) booklet to, among other changes, reflect the discontinuance of the London Interbank Offered Rate (“LIBOR”). The CFPB published a Notice of Availability in the Federal Register to alert the public to an updated version.
While the changes to the booklet include removal of references to the LIBOR, which is expected to be discontinued in 2021, the CFPB made many additional changes. To start, the booklet has a slightly revamped design, which the CFPB states is intended to more closely align to the Your Home Loan Toolkit in appearance. A copy of the new booklet is available through the announcement above or at the CFPB’s site here.
As described in the Notice of Availability, additional changes include “a comparison table that describes adjustable rate mortgages and their differences in relation to fixed-rate loan products; an explanation of how an adjustable rate mortgage works; a tutorial on how to review an ARM Loan Estimate and a lender’s ARM program disclosure; a comparison table for the various adjustable and fixed-rate loan offers that reader has received or will receive; and a description of the risks that come with different types of adjustable rate mortgages.”
The booklet has also been revised to be more concise and is shorter than the current version by several pages.
This revision replaces the prior January 2014 version of the booklet and is available for immediate use. However, lenders may continue to provide the prior version if needed to use existing supplies but should use the updated version as soon as able.
DocMagic will be updating the electronic version of the Consumer Handbook on Adjustable-Rate Mortgages (CHARM.MSC) on June 11, 2020. Print fulfilled packages will, for the time being, continue to use existing supplies of the January 2014 version of the booklet until they are exhausted at which time they will be replaced with the June 2020 version.
If you have any questions about this change, please contact our Compliance department.
