WASHINGTON—Still reeling from underwriting guidelines that went into effect last year, some small lenders are worried that a new mortgage disclosure regime might be the thing that pushes them over the edge.

On its face, the Consumer Financial Protection Bureau's rule to merge various disclosure documents sounds simple enough. But it involves altering so many systems, many see it as an even bigger change than the "qualified mortgage" rule that caused financial institutions such consternation.

The new disclosure rules, which combine requirements of the Truth-in-Lending Act and the Real Estate Settlement Procedures Act, are due to take effect Aug. 1, but many lenders are worried they won't be ready.

They may be the "nail in the coffin for smaller mortgage lenders," said Richard Andreano, a partner at the Ballard Spahr law firm. "After implementing the QM rule and the servicing rules, RESPA/TILA has turned into the back-breaker."

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