WASHINGTON (5/5/15)--Rep. Steve Pearce (R-N.M.), along with Rep. Brad Sherman (D-Calif.), introduced a bill last week that would provide a temporary delay in enforcement and a liability safe harbor period under the Consumer Financial Protection Bureau’s (CPFB) Truth in Lending Act-Real Estate Settlement Procedures Act (TILA-RESPA) integrated disclosures rule.
The rule currently has an implementation date of Aug. 1; the bill would put a safe harbor in place until Jan. 1, 2016.
The bill, introduced last week, would limit enforcement actions during the safe harbor period, as long as a “good faith” effort is made to comply with the rule.
The rule integrates all required mortgage disclosures into two new forms, the Loan Estimate (to be provided within three days of receipt of a loan application) and Closing Disclosure (to be provided at least three business days before closing). The new forms are meant to provide borrowers with additional information to help them understand all costs associated with their loan.
CUNA’s compliance staff has collected a number of resources for credit unions looking to understand how the loan will affect them. A recent CompBlog entry collects the most recent analysis of the new notices, which includes a page-by-page breakdown of the new forms.
CUNA has previously advocated for the CFPB to allow a lengthy implementation period due to the complexity of the rule. In March, a number of House Financial Services Committee leaders wrote to the CFPB pushing for the implementation date to be pushed back to Dec. 31.
The legislators cited Aug. 1 as part of the peak home-buying season, noting that in 2014, 10 of the 25 busiest days for home closings were in August. According to the legislators, 19 of the slowest days for home closings were in January and February 2014.
Delaying implementation, they said, will allow all parties to better understand the changes associated with the new rule.
The new rule does not apply to loans made by a creditor making five or fewer mortgages per year, home equity lines of credit, reverse mortgages, or mortgage loans secured by a mobile home or a dwelling not attached to real property.