NAFCU supports CFPB TRID proposal to fix “black hole”

Comment period closed Monday

The Consumer Financial Protection Bureau shut the door on its comment period for its proposal to amend part of the Know Before You Owe mortgage disclosure rule, also known as the TILA-RESPA Integrated Disclosure rule, or TRID.

The bureau’s proposed amendments sought to resolve the "black hole" issue under TRID, an issue the National Association of Federally-Insured Credit Unions strongly supports.

NAFCU explained in its comment letter to the CFPB on the rule that the bureau issued this proposal to gather information regarding whether to remove the current four-business day limit for resetting tolerances with both initial and corrected Closing Disclosures.

The current rule contains no provision that allows creditors to use a Closing Disclosure to reflect the revised disclosures if there are four or more days between the time the revised disclosures are required to be provided and consummation, the letter stated.

And as a result, it creates a situation where creditors are unable to provide either a revised Loan Estimate or a corrected Closing Disclosure to reset tolerances.

This is commonly referred to as a "gap" or "black hole," which the new proposal seeks to fix.

The proposal would remove the four-business day limit for providing Closing Disclosures, creating much-needed relief and cost savings for credit unions.

But while NAFCU is encouraged by the fact that the CFPB is finally proposing this update, they’re disappointed with the delay in proposing the amendment.

The credit union association emphasized that it “supports the CFPB's efforts to resolve timing issues related to TRID compliance and encourages the CFPB to continue to find ways to reduce regulatory burden for credit unions.”

Once the Federal Register published the rule back in August, the industry had 60 days to weigh in on it. The last day to submit a comment was Monday.

The CFPB said it would weigh comments carefully before it issued a final regulation.

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