The Credit Union National Association (CUNA) is asking the Consumer Financial Protection Bureau (CFPB) to delay implementation of the new TILA-RESPA Integrated Disclosure (TRID) rules to Jan. 1, 2016.
The new rules – which require lenders to furnish a loan estimate disclosure at the start of the mortgage process and a closing disclosure just prior to closing – were originally to take effect on Aug. 1, but the CFPB recently announced its intention to delay implementation Oct. 3.
Bureau officials said an administrative error required the implementation date to be pushed back by at least two weeks. Pressure from lenders and mortgage industry trade groups – arguing that lenders and their vendor partners needed more time to prepare for the new rules – prompted the CFPB to push the date back to October.
In a letter to Monica Jackson, executive secretary of the CFPB, Andrew Price, senior director of advocacy and counsel for CUNA, says CUNA believes the additional two-month period is a step in the right direction ‘to allow for an orderly transition to the new regulatory regime.’
‘We would, however, continue our ongoing call to implement a safe harbor for legal liability and enforcement until the end of the year,’ Price says. ‘We believe this is appropriate given the magnitude of changes requested by the CFPB.’
The CFPB, meanwhile, is still soliciting comments on alternative dates for implementation.
One reason the new rules will be difficult to implement is that lenders will have to keep their existing processes and systems in place in order to accommodate those loans that were already in process before the rules took effect. At the same time, they will have to implement new systems and processes to accommodate loans originated under the new rules.
‘We note that many credit unions will need to run dual tracks during the transition to provide for those loans whose applications are received before the effective date versus those received after the effective date as provided in the rule,’ Price says in the letter. ‘Allowing the industry ample time to properly plan for compliance with this major rule will be crucial to ensure proper implementation.’
Price also raises the issue of the discrepancy in the CFPB's Small Entity Compliance Guide and supplemental information.
‘CUNA continues its request to the CFPB to confirm that creditors that make five or fewer mortgages per year, as outlined in the rule's supplementary information and the September 2014 Small Entity Compliance Guide, are exempt from the TILA-RESPA rule,’ he writes. ‘Now that the effective date has been extended, there is adequate time to correct the inconsistency between the text of Regulation Z and the September 2014 Small Entity Compliance Guide and the supplementary information. We urge the CFPB to address this issue so that the lending operations of credit unions are not negatively impacted and members can continue to receive financial services to meet their needs.’