CFPB Agrees to Possible TRID Rewrite

April 28, 2016
The Consumer Financial Protection Bureau (CFPB) has quietly informed the financial services industry that it has acknowledged complaints and concerns relating to the TILA-RESPA Integrated Disclosure (TRID) rule

The Consumer Financial Protection Bureau (CFPB) has quietly informed the financial services industry that it has acknowledged complaints and concerns relating to the TILA-RESPA Integrated Disclosure (TRID) rule, also referred to as the “Know Before You Owe” rule, and plans to seek their input on making updates to this federal policy.

In a letter to a coalition of industry trade groups, CFPB Director Richard Cordray admitted that this rule “poses many operational challenges” and insisted that the agency was cognizant of how lenders, mortgage professionals and other housing-related businesses were being impacted by the rule.

“We also believe that there are places in the regulation text and commentary where adjustments would be useful for greater certainty and clarity,” Cordray wrote. “Accordingly, we have begun drafting a Notice of Proposed Rulemaking (NPFM) on the Know Before you Owe rule. We hope to issue the NPRM in late July and look forward to your comments on it then.”

Cordray also stated that the CFPB would arrange either one or two meetings in late May or early June to further discuss updating the rule. However, he offered no specifics on locations or what would be open for discussion. The CFPB did not issue any media announcement on the proposed NPFM.

Fred Kreger, CMC, president-elect of NAMB—The Association of Mortgage Professionals, said, "NAMB applauds the CFPB for listening to feedback from stakeholders like NAMB regarding the Know Before You Owe mortgage disclosures. We are mortgage loan originators who listen and counsel our clients daily on the best product that is in their best interest. When we see that there can be better ways to inform consumers and the process itself, we are happy to share that with the CFPB. We look forward in offering further dialog with the CFPB to assist them in their mission of helping consumers understand the process."

“MBA is very pleased with CFPB’s letter and believes the approach laid out should provide a swift path to issuing a final rule that will give lenders, the secondary market and consumers the clarity and consistency of disclosures the market needs," said Pete Mills, senior vice president of Residential Policy and Member Services for the Mortgage Bankers Association (MBA). "In the meantime we appreciate that the Bureau’s “diagnostic period” for the Know Before You Owe rule will continue to accommodate good faith compliance efforts. Finally, we look forward to continuing to work with the Bureau on this and other issues in hopes of protecting consumers and strengthening the real estate finance industry.”

Rob Nichols, president and CEO of the American Bankers Association (ABA), welcomed Cordray’s offer.

“We appreciate Director Cordray’s responsiveness to our concerns about the CFPB’s Know Before You Owe rule,” he said in a statement. “The agency’s interim steps and guidance efforts are welcome, and we agree that several issues will be best resolved in the rule-making process that is being initiated. We are particularly pleased that the notice of proposed rulemaking is on a fast track, which will accelerate and strengthen strong compliance regimes. Many of the elements the industry identified for clarification or amendment were developed in ABA's compliance working group meetings, and we look forward to the opportunity to continue sharing banker feedback with the CFPB.”

The American Land Title Association (ALTA) weighed in on the CFPB's consideration as well. 

“The complexity of TRID makes it difficult for mortgage originators and secondary market investors to determine if they have complied with this massive regulation," said ALTA. "ALTA will use this opportunity to work with the CFPB to ease this uncertainty for our members.”

“Wolters Kluwer appreciates the CFPB’s willingness to provide additional clarity and formal guidance to the TRID rule," said Art Tyszka, senior director and general manager of Mortgage Lending at Wolters Kluwer. "As Director Cordray shared in his letter to industry associations and their members, there have been operational challenges with the new disclosures caused by differing interpretations of specific requirements. We are confident that if the informal guidance provided to us by the bureau is formally incorporated it will reduce the operational challenges and improve the consumer’s experience of shopping for and obtaining a mortgage loan.” 

Compliance