WASHINGTON (10/2/15)--Despite more than 250 members of the U.S. Congress urging the Consumer Financial Protection Bureau (CFPB) to provide a formal hold-harmless period for its new mortgage rule, no such grace period has been put forth, noted Reps. Randy Neugebauer (R-Texas) and Blaine Luetkemeyer (R-Mo.), in a letter Thursday.
The CFPB’s Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule is effective Oct. 3.
Neugebauer (R-Texas) and Luetkemeyer (R-Mo.), chairs of House Financial Services subcommittees, wrote to CUNA and other financial trade organizations Thursday asking them to keep Congress informed of TRID impacts.
“Is it our hope that financial services trade associations monitor TRID-related penalties assessed to financial institutions and other businesses and consumers party to real estate transactions, and report and all enforcement actions, or threat of enforcement actions, to Congress,” the legislators wrote. “Your willingness to keep us informed will allow Congress to have a full idea of the immediate liability costs associated with TRID.”
House Majority Leader Kevin McCarthy (R-Calif.) announced Wednesday that the House would vote on a bill next week that would place a safe harbor from litigation and enforcement until Feb. 1, 2016. The bill, the Homebuyers Assistance Act (H.R. 3192) has strong CUNA support.
The letter, addressed to CUNA President/CEO Jim Nussle, from Neugebauer and Luetkemeyer came the same day as a response to CUNA from the Federal Financial Institutions Examination Council (FFIEC) regarding TRID compliance. Nussle, along with other organizations, sent FFIEC leaders a letter in September requesting clear enforcement guidance.
The letter to CUNA was signed by National Credit Union Administration Chair Debbie Matz, in her capacity as an FFIEC board member. Other co-signers on the original letter received identical letters signed by their prudential regulator, as a member of the FFIEC board.
The letter said the FFIEC recognizes that the mortgage industry has dedicated substantial resources to adapt systems and personnel to the rule.
“Examiners will expect supervised entities to make good faith efforts to comply with the rule’s requirements in a timely manner,” the letter reads. “Specifically, examiners will consider the institution’s implementation plan, including actions taken to update policies, procedures and processes; its training of appropriate staff; and its handling of early technical problems or other implementation challenges.”
CFPB Director Richard Cordray has said on numerous occasions before Congress that early supervision of TRID implementation will be “diagnostic and corrective, not punitive,” but CUNA and other mortgage stakeholders have pushed the bureau to provide more concrete details on how financial institutions will be examined.
“CUNA has frequently asked the agencies to address our concerns surrounding the TRID rule implementation deadline and we are troubled by todays response,” said Elizabeth Eurgubian, CUNA's deputy chief compliance officer. “Therefore, we strongly believe that H.R. 3192 is necessary to protect credit unions from legal liability and examination scrutiny during these early stages of compliance. Congress must pass H.R. 3192 which will provide credit unions protection from enforcement actions and legal liability until Feb. 1, 2016.”