The House of Representatives will vote next week on a bill that will provide a hold harmless grace period for the Consumer Financial Protection Bureau's (CFPB's) TILA-RESPA Integrated Disclosure (TRID) Rule, which is set to go into effect October 3.
On Wednesday, the House Financial Services Committee passed the H.R. 3192 Homebuyers Assistance Act, which could make the grace period official.
House Majority Leader Kevin McCarthy recently released a statement announcing that the House will vote on the Homebuyers Assistance Act next week for those putting forth a good faith effort to comply with TRID.
He added, “Owning a home has always been an important part of the American Dream, and government should never stop people from reaching that goal. Representative French Hill’s (AR-02) leadership on this bill means many Americans will be that much closer to achieving their American Dream.”
CFPB Director Richard Cordray once again sat before the House Financial Services Committee on Tuesday for their semi-annual report to Congress and touted the Bureau's efforts to protect consumers in its four years of existence while taking questions from Committee members on such topics as mortgages, auto lending, payday lending, and the TRID rule.
During the report, Cordray was asked if he was willing to announce a temporary three-month "hold harmless" period for those who are making a good faith effort to comply with TRID.
"We have said, and we're working now to provide written guidance on this, and we're working with the other agencies so we all provide the same written guidance on this, that for some period of months—and I'm not going to be specific about it; it might be longer—there will be a diagnostic approach to this," Cordray said. "Nobody believes that the market participants are trying to abuse consumers here. They're just trying to change their systems and get it right. It will be diagnostic and corrective, not punitive, and there will be time for them to get it right and not have to be perfect on the first day."
In a letter sent to the mortgage industry, the CFPB expressed how it will handle compliance issues and efforts related to TRID.
"During initial examinations for compliance with the rule, the Bureau’s examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance," the letter stated. "Examiners will expect supervised entities to make good faith efforts to comply with the rule’s requirements in a timely manner."
Examiners will consider:
- The institution’s implementation plan, including actions taken to update policies, procedures, and processes
- Its training of appropriate staff
- Its handling of early technical problems or other implementation challenges
The Credit Union National Association (CUNA) showed their appreciation for the grace period notion, which they expect to be highly effective in helping credit unions navigate TRID.
"This bipartisan bill provides certainty to businesses that are trying to comply with the rule as well as an opportunity to work out any implementation issues that come up," McCarthy said. "There is no reason that CFPB regulations should prevent homebuyers from being able to buy and close on a home."
“We thank House Majority Leader Kevin McCarthy for his leadership on H.R.3192, the ‘Homebuyers Assistance Act.’ This legislation will be very important for credit unions as they struggle to comply with the October 3 implementation deadline of the CFPB’s TRID rule,” said Jim Nussle, CUNA president and CEO. “We strongly encourage the Senate to follow suit and pass this bill, and ask that President Obama will quickly sign it into law to ensure the rule has minimal impact on consumers and residential home mortgage closings.”
Meanwhile, the Association of Mortgage Professionals (NAMB) remained encouraged, but wary of the upcoming changes.
"While we're encouraged by assurances made by CFPB Director Cordray to the House Financial Services Committee that there won't be punitive actions taken against companies that make a good-faith effort to comply with TRID," said Rocke Andrews, president-elect of NAMB, "we are still hopeful that Congress will take action to protect consumers and reduce disruption of the real estate market."