Sponsor
Scott Fitzgerald
Representative · R-WI
Representative · R-WI
The bill reduces lender compliance and litigation risk and speeds some closings while preserving a consumer restitution remedy, but it narrows and delays some enforcement and liability avenues—potentially exposing borrowers to hidden fees, rushed decisions, and weaker deterrence against errors.
Homeowners and mortgage borrowers: clearer limits on aggregate third‑party closing fees (safe harbor up to $500 or 5%) reduces surprise closing costs and gives more predictable final charges at closing.
Consumers (homeowners, middle‑class families, small businesses): preserves the right to restitution and private suits so borrowers can be made whole if inaccurate disclosures increase their costs, including post‑closing restitution for APR errors.
Financial institutions and lenders: multiple provisions (clerical error safe harbor, APR rounding tolerance, notice‑and‑cure, good‑faith reliance on CFPB guidance) reduce liability and compliance uncertainty, lowering litigation risk and operational costs.
Homeowners/borrowers: the aggregate safe harbor can mask increases in specific individual fees (one fee up while others fall), so consumers may still end up paying more for particular services despite an overall cap.
Borrowers: narrowing triggers that reset waiting periods and permitting waiver of the 3‑day waiting period can pressure consumers to accept corrected disclosures quickly, increasing the risk of rushed, ill‑informed decisions and mistakes.
Consumers: limiting creditor liability for settlement‑agent errors (when creditor exercised 'reasonable diligence') and expanding good‑faith reliance defenses may make it harder to obtain redress for harms caused by third‑party or guidance errors.
Based on analysis of 4 sections of legislative text.
Alters mortgage disclosure tolerances, limits some creditor liability, sets a 0.125% APR tolerance with a cure option, and creates a regulator notice-and-cure process.
Official title: To amend the Truth in Lending Act to modernize disclosure requirements, establish materiality standards and safe harbors for mortgage disclosures, simplify waiting period requirements, expand tolerances for annual percentage rate accuracy, and for other purposes.
Introduced June 25, 2026 by Scott Fitzgerald · Last progress June 25, 2026
Changes to mortgage disclosure and tolerance rules narrow when corrected disclosures restart waiting periods, create new safe harbors for aggregated closing-cost variances and limited revised loan estimates, and permit post-closing cures for small APR errors. The bill also narrows creditor liability for errors caused by settlement agents if creditors exercised reasonable diligence, requires the CFPB to issue implementing rules, and creates a regulator notice-and-cure process plus a safe harbor for good-faith reliance on CFPB guidance.