On June 3, 2015, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray issued a letter to Congress in an attempt to appease concerns of potential repercussions to lenders that miss the August 1, 2015, deadline to implement the Truth in Lending and Real Estate Settlement Procedures Act Integrated Disclosure Rule (TRID). Congress, and industry leaders and associations, sought a formal grace period that would prohibit enforcement of TRID until January 1, 2016, and provide a safe harbor for lenders alleged to have violated TRID if they made a “good faith effort” to comply.
Citing fears that delay in residential home closings would harm not only the lenders and the housing market but also consumers (especially during the peak buying season), nearly 300 Members of Congress sent a letter to Director Cordray on May 20, 2015, in a bipartisan effort to obtain a grace period for lenders to prepare for the new disclosure rules and forms. Despite diligent and concerted efforts of time and money spent to obtain new technology, hire new employees, and train staff, several lenders have admitted they are not ready to fully implement TRID on August 1. The National Consumer Law Center has stated it did not necessarily oppose extending the due date of implementation, but also that TRID should be implemented and enforced.
In his June 3 letter, Director Cordray reiterated how the CFPB has been helping to prepare the industry for TRID implementation since it was first published in November 2013: issuing guides and forms; listening to industry questions and suggestions, including adopting “two minor modifications and technical amendments to the [TRID];” and releasing a fact sheet on June 3 to clarify when the additional three day review period would be applicable. Director Cordray pointed out that the roll out process will resemble when Title XIV ability to repay and qualified mortgage rules were implemented in January 2014, with an even shorter timeline.
Emphasizing that the CFPB “listen[ed] closely and consider[ed] carefully” the issues raised in Congress’s May 20 letter, Director Cordray stated that he had spoken to the “regulators to clarify that [their] oversight of the implementation of the [TRID] will be sensitive to the progress made by those entities who have squarely focused on making good-faith efforts to come into compliance with the [TRID] on time.” Director Cordray, however, neither quantified the progress needed nor defined “good-faith efforts.”
For now, August 1, 2015, remains the effective date by which time the industry must comply with TRID. It remains to be seen whether or not that means banks who have made “good-faith efforts” to be in compliance by then could be found liable for non-compliance.