In previous blog postings, we discussed an informal announcement from the Consumer Financial Protection Bureau (CFPB) of its intent to delay the effective date of the new integrated mortgage disclosure rule under Truth In Lending Act and the Real Estate Settlement Procedures Act (commonly referred to as the TILA-RESPA Integrated Disclosure rule or TRID rule) and a proposed amendment released by the CFPB to delay the effective date of the TRID rule. The TRID rule was issued by the CFPB in 2014 and combines the mortgage origination disclosure regimes under the Truth in Lending Act and the Real Estate Settlement Procedures Act into a single rule. The TRID rule was scheduled to take effect on August 1. However, the CFPB discovered in June that it had failed to comply with certain procedural requirements so the TRID rule could not take effect on the schedule date.
The CFPB issued a final rule on July 21 officially moving the effective date of the TRID rule to Saturday, October 3. The TRID rule will apply to all covered loans for which a lender receives an application on or after October 3. However, the pre-disclosure requirements under § 1026.19(e)(2) become effective on October 3 regardless of whether an application has been received prior to that time. In addition, the final rule makes certain technical amendments to the Official Interpretations of Regulation Z to reflect the new effective date and makes technical corrections to two provisions.
The CFPB, however, did not provide any grace period or dual compliance period as requested by numerous parties in the industry and Congress. Instead of a grace period, the preamble in the final rule references Director Cordray’s letter to members of Congress on June 3, 2015, whereby he indicated that the CFPB’s “oversight of the implementation of the Rule will be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the Rule on time.”
After an interesting few weeks, the industry now has a locked-down effective date. October 3 is officially show time for this new disclosure regime.