The Consumer Financial Protection Bureau (CFPB) issued a proposed rule Wednesday delaying the original Aug. 1 implementation date of its TILA-RESPA Integrated Disclosures (TRID) rule to Oct. 3.
Now, the bureau is seeking public comment on the change.
The TRID rule consolidates four consumer disclosures currently required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into two forms:
- A Loan Estimate form that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application.
- A Closing Disclosure form that must be provided to the consumer at least three business days prior to consummation.
The CFPB released the TRID rule in November 2013, giving the affected industries about 21 months to digest the 1,800-page rule and its accompanying regulations and make the appropriate changes to their loan processing systems and operations.
However, in recent months, many of the affected industries have voiced concerns that their new or updated software systems won’t be tested or ready by Aug. 1, making it difficult to train staff to handle the changes.
Trade associations representing all of the affected industries requested either a delay in implementation, or the implementation of a formal “hold harmless” period during which the CFPB would not take any enforcement action against entities that could show they were making a “good faith” attempt to comply with the rule.
Although some associations were successful in getting federal legislation introduced to accomplish this, their requests fell on deaf ears, as the CFPB refused to consider postponing the Aug. 1 deadline.
Until last week, when the CFPB announced that it would, in fact, move implementation to October when the bureau said it discovered that it “inadvertently had not submitted the rule report to Congress as required.” The Congressional Review Act (CRA) requires federal agencies to submit their rules to Congress and the Government Accountability Office (GAO) 60 days before the effective date.
The CFPB said that immediately upon discovering its error, it submitted the rule report to both houses of Congress and the GAO on June 16. Because of the oversight, the TRID rule could not take effect until Aug. 15 at the earliest.
But the CFPB, finally acknowledging the affected industries’ push for an implementation delay, conceded that “a brief additional delay may benefit both consumers and industry more than would allowing the new rules to take effect on the CRA effective date.”
However, it also noted that it “continues to believe that the nearly 21-month implementation period, coupled with the bureau’s significant regulatory implementation support efforts, afforded all participants a reasonable opportunity to come into compliance by the Aug. 1 date.”
As with the original Aug. 1 effective date, Oct. 3 is a Saturday. The CFPB said it believes that scheduling the effective date on a Saturday “may allow for smoother implementation by affording industry time over the weekend to launch new systems configurations and to test systems.”
Moral of this story: If you knew you weren’t going to be ready to comply with TRID by Aug. 1, make sure you’re ready to comply by Oct. 3, because it’s highly unlikely the CFPB will delay implementation any further.
The CFPB will accept comments on the proposed extension until July 7. Comments may be submitted online on the Federal eRulemaking Portal. Comments may also be emailed to FederalRegisterComments@cfpb.gov. There is also a snail mail option for those who wish to mail their comments, and the address is Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, D.C. 20552.
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