ABA Banker: Rushing TILA-RESPA Integration Poses Risks to Customers

The rush to implement the TILA-RESPA integrated mortgage disclosures on Aug. 1 poses risks to customers, Cindy Lowman told a House Financial Services Committee panel today. Lowman — the only representative of the banking industry to testify — is president of United Bank Mortgage Corp., Grand Rapids, Mich., and chairman of ABA’s Mortgage Markets Committee.

“It is critical that this rule is implemented smoothly so that it does not end up hurting creditworthy Americans that want to own a home,” she said. “Given the scope and complexity of these new rules, the implementation of this regulation will impose high costs on all lenders and consumers.”

According to an ABA survey released yesterday, many bankers do not yet know when their vendors will have systems in place to handle the new process. And without time to test systems, or an opportunity to comply early, Lowman said there will be numerous kinks to work out after Aug. 1. “Should anything go awry, then the settlement will have to be delayed,” she said. “A delay in settlement could be a huge imposition to a buyer,” especially one who may be selling another house contingent on settlement or who is planning a move.

Lowman voiced ABA’s support for H.R. 2213, which would provide a reasonable grace period during which lenders may be held harmless for TRID implementation errors made in a good-faith effort to comply and urged the Consumer Financial Protection Bureau to provide one on its own.

“Come August, lenders should be ensuring they are providing the best quality care for the consumer during the industry’s busiest season,” she added. “They should not be concerned with the unnecessary burden of properly functioning software systems which is why a delay option seems to be the best solution for all parties involved.”