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The deadline for CFPB Director Richard Cordray to respond to a letter proposing a delay in the implementation of the new TILA-RESPA rule is rapidly approaching. The deadline—Friday, April 17—will be closely followed by the mortgage industry in particular.
The letter was submitted by two House subcommittee chairmen, Randy Neugebauer (R-TX) and Blaine Luetkemeyer (R-MO). The chairmen asked for a delay until December 31, 2015. The TILA-RESPA rule, also referred to as TRID, is currently set for implementation on August 1, 2015.
TRID essentially consolidates four preexisting rules: Initial Truth-In Lending disclosure with the RESPA Good Faith Estimate to create the Loan Estimate form, and the Final Truth-In Lending disclosure with the RESPA HUD-1 to create the Closing Disclosure rule.
The consolidation means new pre-disclosure requirements, tolerance levels for disclosed estimates, and timing requirements for disclosures.
A five month delay will allow for more preparation for compliance by those affected by the rule. Professionals primarily in the mortgage industry have cited the looming August 1 deadline as too short of a timeframe to become familiar with the rule and find supportive software.
However, the August 1 deadline meant affected individuals had almost two years to become acquainted with the rule and requirements of compliance. To aid in preparation, the CFPB released a number of free webinars that detailed an overview of the rule, questions regarding implementation and other beneficial information.
According to the Federal Reserve’s Consumer Compliance Outlook, “The CFPB anticipates a substantial volume of compliance and interpretive questions during implementation and plans to use these webinars to consolidate and address these questions in a way that promotes consistent understanding of the rules and provides a resource that stakeholders may reference.” The first webinar was on June 17, 2014 with all webinar slides available online.
In addition, the CFPB understands that smaller businesses may not have a compliance and/or legal department to help navigate the new rule. Accordingly, the CFPB produced a guide that breaks down in layman’s terms the meaning and compliance requirements of the rule.
Other organizations such as the National Association of Federal Credit Unions (NAFCU), Mortgage Banking Association (MBA), and American Land Title Association (ALTA) have been quick to offer their own guides as well.
Still, there has been substantial concerns from professionals across the spectrum that are worried about being in compliance with TRID by August. With vague rumors from experts of a possible June delay announcement and the latest appeal by lawmakers, the next couple of months may reveal the delay that will bring temporary relief to those in the industry.