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Politics & MoneyMortgage

CFPB changes TRID effective date — again

Proposal open for public comment until July 7

The Consumer Financial Protection Bureau today issued a proposed amendment to the Know Before You Owe mortgage disclosure rule, which proposes to move the rule’s effective date to Oct. 3, 2015.

This comes mere days after CFPB Director Richard Cordrday said that the CFPB would delay the effective date of the TRID rule until Oct. 1.

Now, the CFPB has issued the actual proposal, with a proposed effective date of Oct. 3 instead.

The rule, also called the TILA-RESPA Integrated Disclosure rule, requires additional mortgage disclosure forms and a more complex compliance apparatus for lenders.

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

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 Bureau is issuing the proposal to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until Aug. 15 at the earliest.

National Association of Federal Credit Unions Director of Regulatory Affairs Alicia Nealon said CFPB missed the point and could do more.

“While NAFCU is pleased by the CFPB’s proposed extension of the effective date of the TILA-RESPA Integrated Disclosures, it is disappointing the CFPB has not taken this opportunity to permit an early compliance period that will provide credit unions with valuable time to test their systems before the implementation date,” said Nealon. “NAFCU will continue to urge CFPB to reconsider its position on this issue.”

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 Bureau said that it believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rules.

The Bureau also said that it believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. 

A Saturday launch is also consistent with existing industry plans tied to the original effective date of Saturday, Aug. 1, the CFPB said.

The proposal will be open for public comment until July 7.

A copy of the proposal is available here.

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