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engage.marketing 2021

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Politics & MoneyMortgage

CUNA to CFPB: Extend TRID effective date to end of 2015

Complications, discrepancies justify change

The Credit Union National Association is asking the Consumer Financial Protection Bureau to push back its effective date for the Know Before You Owe mortgage disclosure rule to the end of the year.

For now, the CFPB proposes to move the rule’s effective date to Oct. 3, 2015, from its original Aug. 1 date and its subsequent Oct. 1 change.

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. 

In an open letter to the executive secretary of the CFPB, Monica Jackson, CUNA Senior Director of Advocacy & Counsel Andrew Price says CUNA believes the additional two-month period is a step in the right direction to allow for an orderly transition to the new regulatory regime. 

“We would however continue our ongoing call to implement a safe harbor for legal liability and enforcement until the end of the year to allow for proper transition to the new regulatory regime,” Price says. “We believe this is appropriate given the magnitude of changes requested by the CFPB.”

CFPB has requested comments on alternative dates for extension.

“We note that many credit unions will need to run dual tracks during the transition to provide for those loans whose applications are received before the effective date versus those received after the effective date as provided in the rule,” Price says in the open letter. “Allowing the industry ample time to properly plan for compliance with this major rule will be crucial to ensure proper implementation.  This transition will be cumbersome for most, so any additional time will greatly benefit the industry, minimize costs, and provide a smooth transition to the new regulatory regime.”

Price also raises the issue of the discrepancy in CFPB’s Small Entity Compliance Guide and Supplemental Information.

“CUNA continues its request to the CFPB to confirm that creditors that make five or fewer mortgages per year, as outlined in the rule’s supplementary information and the September 2014 Small Entity Compliance Guide, are exempt from the TILA-RESPA rule,” he writes. “Now that the effective date has been extended, there is adequate time to correct the inconsistency between the text of Regulation Z and the September 2014 Small Entity Compliance Guide and the supplementary information.  We urge the CFPB to address this issue so that the lending operations of credit unions are not negatively impacted and members can continue to receive financial services to meet their needs.”

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