Removing Barriers Blog

CFPB Announces a Delay in TRID Enforcement!
Posted June 17,2015 by CUNA Advocacy

CFPB Director Richard Cordray announced today that the effective date of the TILA-RESPA Integrated Disclosures Regulation will be extended until October 1st from its original date of August 1st. CUNA has strongly advocated for an extension of the effective date of the rule, and while we appreciate the extension of the deadline, we still strongly advocate that there is an official hold-harmless period for compliance until the end of the year. We will keep you updated of any further changes in the rule’s effective date. 

CFPB Director Richard Cordray announced that the effective date of the Know Before You Owe rule, which includes the Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures (TRID will be extended until October 1, 2015 from its original date of August 1, 2015.  

In the CFPB statement announcing the extended effective date, Cordray stated that the additional compliance time is necessary to correct an administrative error which would have delayed the effective date of the rule by two weeks, and for the purpose of better accommodating the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time. It has been reported that the administrative error is that the CFPB failed to comply with the Congressional Review Act’s requirement to notify Congress at least 60 days before a regulation becomes effective.    

Additionally in regards to the TRID rule, earlier this month CUNA brought to the attention of Bureau staff a discrepancy related to the scope of the new requirements. The final rule offers a different description of the scope of the rule than both the guide that the Bureau issued in September 2014 to help small financial institutions understand how to comply with the new rule and the supplementary information that accompanies the rule.  CUNA CEO Jim Nussle sent a letter to the CFPB on Friday expressing our concerns about this and seeking clarity.  

Specifically CUNA is seeking clarity about why the most recent Small Entity Compliance Guide no longer states that the rule does not apply to loans made by a person or entity that makes five or fewer mortgages in a calendar year. The previous guide released in 2014 states, “consistent with the current rules under TILA, the rule also does not apply to loans made by a person or entity that makes five or fewer mortgages in a calendar year and thus is not a creditor.”  However, this language is absent from the most recent guide.  

Based on the previous language and final rule’s supplementary information many small credit unions understood they are exempt from the new requirements if they originate five or fewer mortgages per year, regardless of the number of non-mortgage loans they originate.  CUNA estimated that this discrepancy could affect more than 700 credit unions, who would be exempt under the definition originally provided by the CFPB.  

CUNA continues to engage with the CFPB to seek clarification on this important matter, and we appreciate that the Bureau’s discussions with us about this issue. Additionally, CUNA has strongly advocated for an extension of the effective date of the rule, and while we appreciate the extension of the deadline, we still believe that an official hold-harmless period for compliance needs to be implemented until the end of the year.