CFPB moves TRID date to Oct. 1

"Administrative error" causes delay of Know Before You Owe rule


The Consumer Financial Protection Bureau announced on Wednesday a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure rule until Oct. 1.

“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” said CFPB Director Richard Cordray.

“We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time,” added Cordray.

The required loan documentation consists of two new forms: the Loan Estimate and the Closing Disclosure to ensure compliance.

It was originally set to go into effect on Aug. 1.

These new forms consolidate the TILA-RESPA forms and are meant to give consumers more time to review the total costs of their mortgage. The Loan Estimate is due to consumers three days after they apply for a loan, and the Closing Disclosure is due to them three days before closing. These two requirements have thrown the mortgage industry into a frenzy as they try to comply by the deadline. 

The public will have an opportunity to comment on this proposal and a final decision is expected shortly thereafter.

This announcement comes shortly after huge news earlier this month, when the CFPB announced that it would allow a good-faith enforcement grace period that both the mortgage industry and a bipartisan coalition in Congress had asked for.

The enforcement grace period will be open-ended, David Stevens, chairman and CEO of the Mortgage Bankers Association, said, because Cordray wants to be flexible. At the very least, it should run through the end of 2015, Stevens said.

“We don’t know how disruptive or (not) this implementation will be. If more time is needed, he keeps that flexibility,” Stevens said. “It seems at minimum through the end of the year – and we will all be assessing this roll out.”

Then, on June 10, a large group of industry trade organizations joined Congress in pushing the CFPB to formalize that grace period for the enforcement of the TRID requirements.

Some in Congress, including U.S. Rep. Blaine Luetkemeyer, R-Mo., Chairman of the Housing and Insurance Subcommittee, and U.S. Rep. Randy Neugebauer, R-Texas, Chairman of the Financial Institutions and Consumer Credit Subcommittee, responded to the CFPB’s announcement letter regarding the TRID grace period, saying it was a good first step, but not nearly enough.

This group was then joined by a consortium of industry trade groups that threw its support behind a Congressional effort to formally define the grace period.

In a letter sent to Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, and Rep. Maxine Waters, D-Calif., the ranking member on the House Financial Services Committee, the groups urge the Financial Services Committee to pass H.R. 2213, which would provide a “reasonable hold-harmless period for enforcement” on TRID.


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