Removing Barriers Blog

CUNA Advocacy Urges CFPB to Modify TRID/KBYO rule
Posted June 14, 2016 by Chandler Schuette

CUNA advocacy staff met with the CFPB Monday, as part of a listening session hosted by the Bureau to hear industry concerns on its TRID mortgage disclosure rule. The CFPB’s Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule went into effect last October, despite numerous concerns raised by CUNA and other organizations.  

In January, Director Richard Cordray conducted a conference call with a number of trade organization CEOs, including CUNA President/CEO Jim Nussle. We provided the Bureau with a long list of items that needed to be fixed with TRID around the time of this call.  

At the time, Cordray said the rule would be unchanged. But because of our aggressive advocacy efforts, he reversed course in an April letter that stated the Bureau would initiate a rulemaking “in late July” to address industry TRID concerns. The CFPB recently re-affirmed end of July as the targeted proposed rule date, and are contemplating a 45 to 60 day comment period with hopes of moving to a final rule as quickly as possible. 

The meeting was attended by several senior CFPB staff as well as CFPB Director Richard Cordray. 

During the meeting, several topics were discussed, including: 

  • Clarifying that non-numerical clerical and other nonmaterial errors can be corrected on a Closing Disclosure form for errors on a Loan Estimate form, and expand the errors and cures to allow for other clerical numeric errors; 
  • Allowing any changed circumstance at any time after the Closing Disclosure is given to be modified. At minimum, the Bureau should provide a clear calendar of when changes can be made and charges re-baselined based on the changed circumstances; 
  •  Memorializing the interpretations of various topics, such as lender credits and negative numbers for title insurance, covered in the CFPB’s ongoing webinars to address TRID questions; 

  • Providing sample forms for construction lending, including for one-time closes; 

  • Making the language in the forms and rules consistent with each another; and 

  • Clarifying that cooperatives are covered and allow time for compliance.  

There was significant discussion concerning what could be done by guidance versus rulemaking and the format that any guidance should take.  The CFPB appeared to be somewhat reticent to issue written formal guidance in the form of either FAQs or industry bulletins, despite the fact that many other agencies engage in these practices which are useful to the industry.  This hesitancy is likely based on their experience in the PHH enforcement action case currently being challenged in court.  The unfortunate downside of this case is that it prevents the agency from effectively communicating regulatory expectations to the industry.  Nonetheless, we made several arguments as to why the agency should provide clear and frequent guidance on the TRID rule.

During the meeting the Bureau indicated that it favors providing flexibility versus being overly prescriptive in its rulemaking.  It further intends to consider the implications of changes from a vendor perspective.  The agency intends to prioritize issues for purposes of rulemaking and is exploring addressing issues in other methods (other than the webinars that have been provided so far). Ultimately, we believe the fact that the CFPB is engaging in this type of rulemaking is a positive step towards fixing many of the compliance issues with TRID.