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CFPB is Considering Lightening the TRID Load

Complaint BHConsumer Financial Protection Bureau (CFPB [1]) Director Richard Cordray has written a letter [2] to financial industry trades and their members recognizing the “operational challenges” the industry is experiencing as a result of the Bureau’s TILA-RESPA Integrated Disclosure (TRID) rule implemented last October.

With that in mind, Cordray said in his letter that the Bureau is considering making some “adjustments” in the regulation text to provide greater certainty and clarity.

Since TRID, also called the “Know Before You Owe” rule, was implemented on October 3, and even for months prior, many in the mortgage industry have complained of the complexity of implementing the rule and the difficulty of complying, despite the rule’s goal of making it easier on all parties involved to close a mortgage loan.

“We recognize that many of implementation of the Know Before You Owe rule poses many operational challenges,” Cordray wrote. “We also recognize that implementation is particularly challenging because of the diversity of participants, from small to large financial institutions, mortgage brokers, real estate brokers, and title companies, through warehouse lenders, investors, due diligence firms, and ratings agencies, whose perspectives may vary as to what compliance under the rule requires.”

Recognizing that many in the industry are struggling with implementing and complying with TRID, Cordray said the CFPB provides informal guidance on how to implement and comply with TRID which comes in the form of a Regulatory Implementation webpage. At the same time, he said the Bureau believes that “there are places in the regulation text and commentary where adjustments would be useful for greater certainty and clarity.”

“We recognize that many of implementation of the Know Before You Owe rule poses many operational challenges.”

Richard Cordray, CFPB Director

Therefore, Cordray wrote in the letter, the CFPB is currently in the process of drafting a Notice of Proposed Rulemaking (NPRM) on the Know Before You Owe rule. Cordray said the CFPB hopes to issue the NPRM in late July, at which time the Bureau will accept public comments on it.

“We will continue to work with industry, consumers, and other stakeholders to support a smooth transition for the mortgage market,” Cordray wrote. “As we do so, we and other regulators are all agreed that our oversight of the implementation of the Know Before You Owe mortgage disclosure rule in the months ahead will continue to 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.”

National Association of Federal Credit Unions (NAFCU) Director of Regulatory Compliance Brandy Bruyere  applauded Cordray's response to industry concerns about TRID.

“We appreciate Director Cordray’s consideration of our concerns regarding the need for greater clarity on the TRID rules,” Bruyere said. “This is a welcome first step and there is still a lot of work to be done in order to truly address the ambiguities in the TRID rule. We look forward to the bureau’s continuing efforts to facilitate the compliance process.”

Click here [2] to view a copy of Cordray’s letter.