On April 28, 2016, the Consumer Financial Protection Bureau (CFPB) issued a letter to industry trade members announcing its plan to issue a Notice of Proposed Rulemaking (NPRM) to provide further clarification of the Truth in Lending Disclosure Rule (TRID). Since TRID went into effect on October 3, 2015, various industry groups have asked the CFPB for clarification regarding various implementation issues such as the scope and applicability of TRID’s cure mechanisms, liability under TRID, rate lock extension issues, and lender credits, to name a few.
This announcement marks the most significant step in the TRID implementation process since it went into effect seven months ago. While the industry reaction to TRID has been mixed, the CFPB notes that according to recent data from Ellie Mae, “closing times are now shorter than they have been for the past year, and closing rates are rising to their highest levels since the data was first monitored in August 2011.”
The CFPB’s letter does not provide details as to which provisions of the regulation will be revised, but it does imply that some of the CFPB’s informal guidance may be incorporated into the regulation. Indeed, some industry insiders have expressed a need for consistency between the CFPB’s nonbinding clarifying guidance and the regulation text itself. The CFPB’s letter recognizes that despite its significant cache of TRID resources, such as archived webinars, compliance guides, annotated forms, and fact sheets, the industry will be better served if the CFPB can incorporate its existing informal guidance into the regulation text.
According to the letter, the CFPB intends to issue the NPRM in late July. In the meantime, the CFPB will meet industry insiders, consumers, and other stakeholders to obtain detailed feedback regarding TRID implementation.
Stay tuned as we monitor this issue for further developments.