The Consumer Financial Protection Bureau (CFPB) announced this week a proposal to push back the effective date of the TILA-RESPA Integrated Disclosure rule, which combines two mortgage disclosure regimes into one. The new date is set for October 1. The rule, originally set to go into effect August 1, has been making headlines for months, with feedback coming in from every end of the real estate spectrum that the start date was too soon.
The CFPB credits the two-month delay to an “administrative error.”
“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” says CFPB Director Richard Cordray.
“We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time,” added Cordray.
“Clearly, the Bureau listened to the concerns that industry has for consumers,” comments Michelle Korsmo, chief executive officer of the American Land Title Association. “Consumers would be helped even more if the CFPB also announced a specific hold-harmless period for industry to understand how the forms will work in real life transactions. Under TRID, some mortgage lenders and settlement service providers may initiate additional risk-management tactics that could slow the closing process for homebuyers.”
Frank Keating, ABA president and CEO, concurs. “This extension will help protect consumers from disruptions during a traditionally busy period for home purchases,” says Keating. “It will also help to assure new loan origination systems and compliance software under development by lenders and the vendors on whom they rely will be adequately installed and debugged, and staff training completed, before the effective date.”
“The action announced today by the CFPB is a welcome step. NAR has long advocated the need to avoid implementing the new regulation during the peak summer selling season,” said National Association of REATLORS® President Chris Polychron. “REATLORS® appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers.”
Stay tuned to RISMedia for continuing coverage.