WASHINGTON (9/30/15)--An announcement on the Consumer Financial Protection Bureau’s (CFPB) upcoming mortgage rule will be coming before its Oct. 3 effective date, bureau Director Richard Cordray said Tuesday.
During his semi-annual testimony before the House Financial Services Committee, Cordray said the bureau will make an announcement regarding the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule.
Although the CFPB pushed back the original TRID effective date, CUNA, other mortgage stakeholders and legislators have pushed for a hold harmless period that would not punish mortgage lenders for noncompliance as they adjust to the new forms and rules specified by TRID.
“I’m pushing hard to see to it that [an announcement] is out before Oct. 3,” Cordray said, in response to a question from Rep. Brad Sherman (D-Calif.) about a safe harbor period. “It is going to happen, and it is going to be along the line of what you have asked for, and I think it will be satisfactory.”
In previous hearings, Cordray has maintained that the bureau would not look to punish mortgage participants working in good faith to adhere to the new rules. CUNA has supported legislation that would provide a concrete safe harbor from litigation and enforcement, and urged the CFPB to issue more specific guidance on how “good faith” efforts will be examined.
“We have said, and are working now to provide written guidance on this, that for some period of months, I can’t be very specific about it, there will be a diagnostic approach to this,” Cordray said. “Nobody believes that market participants are going to be trying to abuse consumers here; they’re trying to change their systems. So we’ll be diagnostic and corrective, not punitive, and there will be time for them to work to get it right and not be perfect on the first day.”
Cordray added, in response to a later question by Rep. Robert Hurt (R-Va.), that the bureau is working with federal regulatory agencies to put a period safe from enforcement and litigation into writing.
“I’ve set it verbally, I’ve made my commitment, and you’re going to see it in writing from all of the agencies that during the early period, which could be less or more than six months, we will be diagnostic and corrective, not punitive,” Cordray said. “That’s the way we’re going to handle it, and I’ve talked to the other agencies, and they agree; we’re just trying to be nuanced about it.”