On June 24, the Consumer Financial Protection Bureau (CFPB) proposed an amendment to the TILA-RESPA Integrated Disclosure Rule (TRID), seeking to delay the rule’s effective date until Oct. 3. The bureau indicated that it was postponing the rule’s implementation due to an administrative error.
“The bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rules,” the agency said in a release. “The bureau further 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.”
The rule’s original effective date had been set for Aug. 1, and, in May, a group of more than 200 Congressional members sent a letter to the bureau requesting a grace period. In response, the bureau said it would be cognizant of those companies that were trying to comply in good faith. However, at that time, the bureau did not expressly delay the rule’s enforcement.
One concern for lawmakers is that under TRID, lenders cannot use the new integrated form until the effective date of the rule. This means that lenders do not get any time to test the forms out with real customers until the date it goes into effect – the same date that the CFPB will being holding businesses accountable for failure to comply with the rule. With no additional time to work out the kinks in the forms, members suggested that the bureau should implement a grace period where the industry could send data to the CFPB about issues it comes across while attempting to use the forms.
Review of this new proposal suggests that the CFPB failed to adhere to the Congressional Review Act (CRA). Under the CRA, a rule cannot take effect until the agency promulgating the rule submits a mandatory report to Congress and the Comptroller General of the Government Accountability Office. The CRA states that major rules, like TRID, cannot go into effect until 60 days after: 1) receipt by Congress or 2) publication in the Federal Register. Apparently, the CFPB failed to submit the required rule report to Congress on time. The report was submitted late – on June 16. Therefore, under the CRA, the TRID could not go into effect until August 15. The CFPB stated that it thinks an additional delay will be beneficial to the industry.
The bureau’s proposal to delay the TRID effective date does not suggest that it plans to implement an enforcement grace period as requested in the Congressional letter.
The CFPB is asking for public comments regarding the proposed delay. Comments can be made at www.regulations.gov. The Docket number is CFPB-2015-0029, and comments are being accepted until July 7.