Ongoing compliance costs from the TILA-RESPA Integrated Disclosure (TRID) rule continue to affect credit union lending, CUNA wrote to the Consumer Financial Protection Bureau (CFPB) Tuesday. The CFPB is currently assessing the TRID rule as required by statute.

“Because credit unions, as community-based lenders, are typically smaller in asset size and loan volume, complex regulatory requirements like the TRID Rule have a disproportionate effect…in many cases, credit unions are required to rely on vendors or pool resources through a CUSO to address the extensive list of laws and regulations their institutions must comply with,” the letter reads. “The reality is that when credit unions are burdened by the cost of regulation, consumers receive fewer options for financial products and services. Ultimately, when consumers are unable to access desired credit and services from their local credit union, they are often required to turn to higher-cost lenders that may not have their best interests and financial wellness in mind. “

CUNA’s study on regulatory impact on credit unions in 2018 found TRID rule compliance expenditures cost credit unions $563 million in 2018 alone.

CUNA also conducted a survey of its Lending Council, which comprises senior lending professionals at state and federal credit unions this month.

Results include:

• 83% reported “significant” or “very significant” initial costs related to the TRID rule’s implementation;
• 63% reported “significant” or “very significant” ongoing costs associated with TRID compliance;
• 57% reported the ongoing costs of TRID compliance diminished lending capacity due to longer timelines for borrowers and increased costs to offer and execute loans;
• 52% of the survey group stated the TRID Rule has “somewhat” or “significantly” increased the price of loans; and
• 33% percent acknowledged a “significant” or “somewhat” decrease in loan volume. 

“The TRID Rule is by no means perfect and there are areas that should be addressed. But as the rule assessment progresses, CUNA respectfully requests the Bureau refrain from adopting broad, wholesale changes to the TRID Rule’s structure,” the letter reads. “Dramatic changes to the TRID Rule would only serve to create additional compliance costs and require credit unions to expend finite resources that could otherwise be applied toward serving their members. Rather, the CFPB should focus its efforts on providing clarity using targeted interpretive rules or official guidance that resolves ongoing compliance concerns.”

CUNA also called for the CFPB to make the following changes to the rule:

• Address the issue of closing delays and consumer waivers of mandatory waiting periods, which creates unnecessary friction in the process;
• Permit creditors to cure any clerical errors in a loan file within a reasonable period after closing;
• Allow for variances on closing costs not charged by the lender; and
• Expanding the official guidance available to clarify the treatment of second lien loans under the TRID rule.