Despite Delay, TRID Preparation Still a Concern for the Financial Industry
A hoped-for reprieve materialized, but lenders shouldn’t stop preparing for a brave new world of loan disclosures.
The Consumer Financial Protection Bureau (CFPB) issued the TILA-RESPA Integrated Disclosure (TRID) rule in 2013. It was scheduled to take effect Aug. 1. But in mid-June, CFPB Director Richard Cordray issued a statement that it would delay the effective date until Oct. 3.
“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time,” Cordray said in a statement issued June 17.
TRID requires lenders to deliver upfront disclosures three days after receiving a borrower’s application and provide the final settlement disclosure three days before a loan closes — or risk delaying the transaction. Those disclosures are different, as well. The Loan Estimate replaces the Good Faith Estimate and the initial Truth-in-Lending Disclosure. The Closing Disclosure replaces the HUD-1 Settlement Statement and final Truth-in-Lending Disclosure.
The delay came after lenders lobbied Congress for help. On June 10, the American Bankers Association and several other trade groups urged the House Financial Services Committee to advance a bill that would establish a formal “hold harmless” period after the new integrated mortgage disclosures take effect.
Even credit unions, which often are at odds with banks in the public arena, spoke out about TRID. Gaye DeCesare, president and CEO of Compliance Assistance for Credit Unions, was quoted in Credit Union Journal saying, “There is no live testing, which is a real concern.”
But even with the welcome reprieve, lenders shouldn’t delay their TRID preparations. Here’s a list of resources* that could help you get up to speed:
The Mortgage Bankers Association has created a TRID prep page for its members stocked with guides, conferences and online forums — including one called “Better Late than Never.” The association promises a self-study Web course on TRID will be coming soon.
The National Association of Realtors has created a TRID topics section on its website with links to videos, news articles and association statements on what the regulatory changes could mean to homebuyers and sellers. Likewise, the American Land Title Association’s website is geared more toward real estate professionals than lenders, but it offers some helpful information about electronic collaboration.
When you’re ready to get in the weeds, learn more about the uniform closing dataset (UCD), a component of Fannie Mae and Freddie Mac’s Uniform Mortgage Data Program designed to provide a common industry dataset to support the TRID closing disclosure requirements.
Finally, the CFPB’s website is the best place to get information straight from the source. Check out its TILA-RESPA webpage for links to video webinars, sample forms, fact sheets, FAQs — and, of course, disclosure timelines.
*Financial institutions should consult their legal and/or compliance specialists for interpretation of the rules, determination of impact to their business, and suitability of individual compliance solutions. Equifax makes no warranty of any kind or nature with respect to any content within these resources and Equifax specifically disclaims all liability for any claim of whatever kind or description arising from the use of these resources.