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CFPB / RegulatoryMortgage

Trade groups join Congress to push CFPB for formalized TRID grace period

Want “reasonable hold-harmless period”

A large group of industry trade organizations is joining Congress in pushing the CFPB to adopt a formalized grace period for the enforcement of the complex TILA-RESPA Integrated Disclosure requirements that go into effect Aug. 1.

Last week, HousingWire reported that the Consumer Financial Protection Bureau intended to grant an undefined grace period for TRID enforcement, after both the mortgage industry and a bipartisan coalition in Congress asked for it.

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.

Now, a consortium of industry trade groups is throwing 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.

H.R. 2213 was introduced last month by Congressman Steve Pearce, R-N.M., and co-sponsored by Congressman Brad Sherman, D-Calif., and prevents enforcement of the integrated disclosure requirements and the filing of any related lawsuit if (1) the person has made a good-faith effort to comply with the requirements and (2) the conduct alleged to be in violation of the requirements occurred on or before Dec. 31, 2015, thus allowing stakeholders and the CFPB to test the effective operation of the rule.

“We appreciate that the Bureau indicated it will be sensitive to the progress made by those entities that make good-faith efforts to comply,” the letter states.

“At the same time, industry needs more certainty that their good-faith efforts to comply while still meeting consumers’ expectations does not expose lenders and settlement service providers to litigation during the initial period after the regulation becomes effective,” the letter continues. “This certainty will reduce the likelihood that consumers will experience delays or disruptions in the months following the Aug. 1 implementation date.”

The letter, which can be read in full here, is signed by the American Bankers Association, the American Bankers Insurance Association, the American Escrow Association, the American Land Title Association, the Appraisal Institute, the Community Home Lenders Association, the Community Mortgage Lenders of America, the Consumer Bankers Association, the Consumer Mortgage Coalition, the Credit Union National Association, the Housing Policy Council of the Financial Services Roundtable, the Independent Community Bankers of America, the Mortgage Bankers Association, the National Association of Federal Credit Unions, the National Association of Home Builders, the National Association of Mortgage Brokers, the National Association of Realtors, the Real Estate Services Providers Council and the Appraisal Firm Coalition.

The letter states that a “hold-harmless period” would help to ensure that consumers’ real estate closings will not be disrupted after the TRID implementation deadline.

The groups note that 250 members of the House and 41 senators have also written to the CFPB urging the action that H.R. 2213 would mandate.

“We appreciate that the Bureau shares our goal for a smooth and successful implementation of the regulation,” the letter states. “While the industry has been granted time to prepare for this new disclosure regime, there is no transition period for the regulation. A hold-harmless period allows the Bureau to work with industry to gather data about implementation and provide written guidance to address common industry implementation hurdles that emerge after these new disclosures are put into use.”

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