WASHINGTON (6/22/15)--Last week’s announcement by the Consumer Financial Protection Bureau (CFPB) that it would propose to move the effective date of the Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures (TRID) rule was at least in part the result of a missed deadline.
In the bureau’s statement announcing the extended effective date, CFPB Director Richard Cordray stated that the additional compliance time is necessary to correct an administrative error that 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 CFPB failed to submit notice of the rule to Congress and the Government Accountability Office at least 60 calendar days before it was to take effect.
The rule’s effective date was Aug. 1 and Cordray is proposing to move it back to Oct. 1. (See related story: CUNA seeks clarification about discrepancy in TRID implementation.)
“If you’re wondering what the ‘administrative error’ was that forced CFPB to delay its TRID rule, we have been informed by CFPB that the bureau failed to comply with the Congressional Review Act’s requirement to notify Congress at least 60 days before a regulation becomes effective,” said Jeff Emerson, a spokesman for the House Financial Services Committee (HousingWire Jun 19). “The CRA is a basic tool for accountability.”
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, along with 18 other trade associations, wrote to Congress about the need for a temporary “safe harbor,” at least until the end of the year, for credit unions and other institutions making good-faith efforts while implementing mortgage loan transaction requirements.
The trade associations support H.R. 2213, which would put in place a firm safe harbor to protect credit unions and other financial institutions from enforcement and liability for a set time as they adjust to one of the biggest changes to the mortgage market in recent memory. CUNA wants the safe harbor extended to at least the end of the year.