Bipartisan push begins in Congress to change part of CFPB’s TRID rule

Reps. French Hill and Ruben Kihuen lead effort on changing title insurance issue

In an increasingly rare moment of bipartisanship, two Congressmen from opposite sides of the political aisle are partnering to push for a change to the Consumer Financial Protection Bureau’s Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, or TRID.

On the Republican side, the effort is being led by Rep. French Hill, R-Arkansas, who has been very vocal about his issues with the CFPB and the TRID rule in the past.

A few years ago, Hill authored a bill in the House of Representatives that called for an official grace period on TRID enforcement.

More recently, Hill wrote a commentary for his local publication, the Arkansas Democrat Gazette, on the need for the CFPB to be reined in. In the article, Hill wrote that the CFPB’s actions “are actually harming consumers.”

Now, Hill is working with Rep. Ruben Kihuen, D-Nevada, to change part of the CFPB’s TRID rule because the bureau is “unwilling to fix this problem on its own.”

The bill was first discussed in a meeting of the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee last month.

At the time, the Republican arm of the House Financial Services Committee said that the bill, the TRID Improvement Act of 2017, would amend the Real Estate Settlement Procedures Act and the Truth in Lending Act to expand the time period granted to a creditor to cure a good-faith violation on a loan estimate or closing disclosure from 60 to 210 days.

Now, the bill is being officially introduced, although Hill’s office makes no mention of extending the time period to cure a good-faith violation.

The issue at hand in the TRID Improvement Act of 2017 is related to title insurance and how its fees are presented on both the Loan Estimate and the Closing Disclosure.

According to Hill’s office, homebuyers in some states are not receiving an “accurate disclosure” of their title insurance premiums, because, in those states, the CFPB “does not allow the calculation of a discounted rate known as ‘simultaneous issue,’ which is a rate title insurance companies provide to consumers when they purchase a lenders and owners title insurance policy simultaneously.”

Hill’s office states that the discounted title insurance rate provides consumers with “an effective discount on their owners title insurance policy in order to protect their property rights for as long as they own their home.”

But, according to Hill, the TRID forms don’t allow for this discounted rate to be presented accurately.

To that end, Hill and Kihuen introduced the TRID Improvement Act of 2017, which addresses this issue.

“Consumers deserve to know the costs of their title insurance premiums when they purchase a home,” Hill said in a statement.

“As TRID has become a massive, complex rule, it is hindering financial institutions’ ability to share accurate information to consumers during the mortgage closing process,” Hill continued. “This legislation seeks to correct this error by ensuring that consumers know the exact cost of their title insurance – not the number reported as one price on a lending estimate and another price on a closing document.”

Hill added that he is “proud to work with my colleague, Representative Ruben Kihuen, to take the first step in undoing this compliance nightmare.”

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