CUNA’s compliance team has received a number of questions recently that makes one thing perfectly clear: One year later, TRID continues to present challenges for credit unions. TRID stands for the Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Disclosure Rule.
There has been an uptick in questions lately related to good faith tolerances and the placement of certain fees on the Loan Estimate and Closing Disclosure. What happens, for instance, if a credit union allows a member to shop for a particular settlement service provider but fails to provide the Written List of Service Providers as required by Regulation Z?
Well, it changes everything. All of the settlement services the member was permitted to shop for become subject to the 10% tolerance threshold. And if the provider is an affiliate of the credit union, the settlement charge is subject to the zero tolerance threshold.
In addition, what happens when a credit union allows members to shop for a settlement service provider and the member selects a provider from the credit union’s written list? Where are those fees disclosed on the Loan Estimate and Closing Disclosure?
On the Loan Estimate, the charge is listed in Section C-Services You Can Shop For. However, if the member selects a provider from the credit union’s written list, the commentary to Section 1026.38(f)(3) tells us that the settlement charge must be disclosed on the Closing Disclosure in Section B-Services Borrower Did Not Shop For.
CUNA’s compliance staff recently blogged on this issue in the CompBlog. Click here to read more.
CUNA remains vigilant in its advocacy efforts for credit unions, urging the Consumer Financial Protection Bureau to continue fixing TRID issues. In its most recent comment letter to the agency, CUNA urged the CFPB to continue providing both formal and informal guidance to the industry related to ongoing implementation issues surrounding TRID.