In July, the Consumer Financial Protection Bureau (CFPB) announced its decision to postpone the TILA-RESPA Integrated Disclosure (TRID) rule until October 3. Now, that date is almost upon us and trade associations are reaching out to the government for more guidance before the new regulation goes into effect.
On Sept. 8, a group of 18 trade organizations including the American Land Title Organization, the American Bankers Association and the American Escrow Association, sent a letter to the CFPB and the Federal Financial Institutions Examination Council, requesting policy guidance.
“In official issuances and communications to Congress, the CFPB recognized that the TRID rule poses ‘significant implementation challenges’ for industry, and has indicated that regulators will be sensitive to the good-faith efforts of lenders to comply with the TRID requirements in a timely manner,” the groups said. “However, we believe that without formal guidance, fear of enforcement actions for errors committed in good faith will severely constrain consumer access to needed mortgage credit.”
The groups urged the FFIEC to provide precise explanations regarding its policies for examining financial institutions once TRID goes into effect in October.
“Transitioning to the new TRID regulatory framework is a sea change for every participant in the mortgage lending 2 process: borrowers, lenders, appraisers, agents, brokers, builders, investors and other service providers,” the groups said. “Industry stakeholders have undertaken extensive efforts to comply with these rules, but, even now, they are discovering significant compliance issues.”
The organizations indicated that may of their concerns will require formal guidance, which likely cannot take place before the October deadline. The letter urged the FFIEC to implement a formal transition period and address how it will examine institutions for compliance with TRID during that period.
“We ask that FFIEC recognize the severe penalties that can arise under these new rules, and establish predictable regulatory restraint by enunciating clear guidelines that, if met in good faith, would afford institutions with enforcement and examination relief for a reasonable time period following October 3,” the letter said.
In July 15 testimony before the Senate Committee on Banking, Housing and Urban Affairs, CFPB Director Richard Cordray said for the initial stages of implementation the bureau would not be seeking punitive measures for institutions to are attempting to comply in good faith but fail to strictly adhere to the rule. Instead, Cordray indicated that initially, the bureau would point out errors and provide guidance on how they should be corrected. However, there has been no formal transition period set in place to determine how long regulators will be lenient.