CFPB amends TRID to fix so-called “black hole”
The TILA-RESPA integrated disclosures rule (TRID) is quite a way to start a Monday morning, so I apologize in advance. On Thursday, April 26, the CFPB issued a long-awaited amendment to TRID that will go into effect 30 days after the rule publishes in the Federal Register. The amendments are designed to fix the so-called TRID “black hole” and give credit unions more flexibility when there are changes in between the time the Closing Disclosure (CD) is provided to a borrower and consummation.
Background: What Is The Black Hole
TRID requires an estimate of costs to be provided on the Loan Estimate (LE), which must be made in “good faith.” Good faith generally means that the costs at closing do not exceed the amount initially disclosed to the member. Some fees can vary within a “tolerance” and in specific circumstances; a credit union may issue a revised LE to reset these tolerances. Currently, section 1026.19(e)(4)(ii) prohibits a credit union from providing a revised LE after the CD has been delivered. It also requires that any revised disclosure be provided within three business days after the reason for the revision is discovered and not later than four business days prior to consummation. If there are less than four business days remaining before consummation, comment 19(3)(4)(ii)-1 clarifies that creditors are allowed to reset tolerances with a CD instead of a revised LE.
continue reading »
