In a joint comment letter with the Consumer Bankers Association yesterday, ABA responded to a proposal by the Consumer Financial Protection Bureau to amend the TILA-RESPA integrated disclosure rule. The proposed changes would codify informal guidance and clarifications that the bureau has issued since the rule was originally finalized.
Lack of clarity about liability for unintentional mistakes and technical noncompliance with TRID remains a major concern among lenders and investors, the associations said. To help address these concerns, they urged the bureau to take several steps, which include publishing the specific statutory provisions relied upon to implement TRID’s disclosure provisions and granting a “safe harbor” for model forms issued by the bureau, which lenders can use to guide their formatting and calculation for the disclosures. They also called for an extension of the “good faith” compliance examination policy — which has been in place since TRID was first issued — until the compliance deadlines for the proposed rules. Finally, they recommended that the CFPB establish a formal process to address ongoing compliance and legal issues related to TRID as they arise.
The groups expressed support for a number of proposed fixes in the rule, including those allowing creditors to use corrected closing disclosures to reset applicable good faith tolerances when there are fewer than four business days remaining before consummation or when the closing disclosure has already been issued. They called for further clarification on several specific provisions as the rulemaking moves forward, and importantly, asked that temporary financing, such as construction loans, be entirely excluded from TRID coverage.
“[T]he associations are very appreciative of the numerous amendments offered in this proposal, and our preliminary analysis reflects that this proposed rule will resolve multiple ambiguities that banks deem significant,” the groups wrote. “[We] would urge that the bureau explicitly allow that any tolerance or cure provisions enacted in this rulemaking be made available for loans that predate this proposal. This step would allow for the correction of previous non-compliance caused by the interpretive ambiguity that the bureau is now fixing.” For more information, contact ABA’s Rod Alba.