Credit Union National Association comment letter on proposed amendments to Truth in Lending Regulation

WASHINGTON, DC (October 18, 2016) — October 17, 2016

Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1275 First Street, NE
Washington, DC 20002

Re: Amendments to the Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z)
Docket No.: CFPB-2016-0038 or RIN 3170-AA61

Dear Ms. Jackson:

On behalf of America’s credit unions, I am writing regarding the Consumer Financial Protection Bureau’s (CFPB) Amendments to the Federal Mortgage Disclosure Requirements under the Truth in Lending (Regulation Z) (TRID Amendments).  The Credit Union National Association (CUNA) represents America’s credit unions and their more than 100 million members.

We greatly appreciate the CFPB requesting input from stakeholders on the Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure (TILA/RESPA or TRID) amendments. We are further grateful that in light of the significant implementation challenges that have arisen since the effective date of the TRID final rule, the CFPB is willing to address known issues with the new provisions. CUNA acknowledges that this rulemaking does not reopen major policy decisions with the TRID final rule, but instead is solely for the purposes of addressing specific implementation challenges. As such, we are limiting our comments to those matters addressed by the proposal, and are overall supportive of the proposed changes that address the operational issues with the regulation.

Our request, however, is that the CFPB continue to engage in rulemaking and otherwise continue to provide both formal and informal guidance to the industry on a more frequent basis for those issues that continue to impede implementation of the TRID rule. We appreciate that the CFPB has engaged in outreach efforts such as the publication of the small entity compliance guide and various webinars, however, the CFPB can and should do more. For example, searchable written transcripts of the webinars would be greatly appreciated by credit unions, as would published Frequently Asked Questions (FAQs) that are updated regularly that address common questions. We are unclear as to the CFPB’s hesitancy to provide these methods of communicating its’s interpretation of various compliance issues, as these resources are common with other agencies. For example, FinCEN provides FAQs for the filing of Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs), a similar highly technical form that has frequent questions over correct completion. Due to the complexity of the TRID rule, such guidance would be greatly appreciated by our industry.

Errors and Cures:

Turning specifically to the rule, we believe the CFPB should address errors and cures made in Loan Estimates or Closing Disclosures. We are disappointed this area was omitted from the rulemaking. The CFPB states the rationale was that further defining cure provisions would be extraordinarily complex and would undermine incentives for compliance with the rule.

We agree the rule is complex, which illuminates the industry’s ongoing difficulty with compliance. The Dodd-Frank Wall Street Reform and Consumer Protection Act initially only directed merging the RESPA and TILA disclosures, which should have resulted in a simplification of the process and number of forms, and more useful information for the consumer. Therefore, the solution for the additional complexity is simple – make the rule less complex. With respect to incentives to comply with the rule, there are plenty including the availability of attorney’s fees and the onslaught of enforcement actions coming from the CFPB. Lenders are quite incentivized to comply and are spending significant resources to do so.

The more important issue in this regard, however, arises from the secondary market and the private investors/due-diligence firms rejection of loans due to their perception and conservative view of what constitutes an error. So to the extent the CFPB can provide clarity as to what is acceptable or provide clear guidance as to what and how items can be cured, it would go a long way to smoothing out transfers to the secondary market. This can only benefit consumers in the long run, as more mortgage options will be available and likely less costly. We urge the CFPB to revisit the treatment of errors and cures in the final rule.

Simultaneous Issue of Title Insurance Premium:

We also urge the CFPB to reconsider its position not to amend the rules to address the circumstance about how a negative number should be disclosed. This situation can occur in a homebuilder transaction where multiple discounts can apply in certain states. The CFPB should confirm that a negative value can be disclosed, or in the alternative, provide for an alternate disclosure when the formula results in a negative number.

The “Black Hole”:

We applaud the amendments to the “Black Hole” that the CFPB is proposing in the rule. We do, however, believe that the guidance should clarify it also applies to rate locks, as they appear to be excluded under §1026.19(e)(3)(iv)(D). We urge clarification in this regard. The changes, otherwise, go a long way to make the closing process smoother where the current inflexible timing requirements create unnecessary difficulties in closing a transaction.

Changes We Support:

Although the list of changes in the proposed rule are too numerous to list, we particularly are grateful and support changes in the following areas: expansion of the partial exemption for certain down payment and homeowner assistance programs; clarification on the treatment of Cooperatives; clarifications on constructions loans; treatment of escrow accounts (cancellations and disclosures); and the information sharing clarifications


CFPB has proposed an effective date of 120 days after publication in the Federal Register but seeks comment on whether there is any better or worse time for the effective date. Clearly, the end of the year would likely be the worst time as in some states, closings tend to be at maximum volume due to the expiration of the ability to claim homestead exemptions and other reasons. August would preferably be the best time.

We appreciate that the CFPB is aware that any changes, even those that help credit union operations, are likely to incur costs due to reprogramming and training. We, therefore, recommend an earlier compliance timeline for those changes related to the official interpretations, but a voluntary compliance period coupled with a mandatory compliance deadline of one year from the effective date for provisions that will require credit unions may to be reliant on outside vendors to make changes to their systems. For example, the items that relate specifically to changes to the forms such as the seller credits, the cash to close table, the fees that are now required to be closed that were previously optional, etc., will require systems changes in which a phase-in period would be appreciated.

Once again, we appreciate the CFPB’s efforts to clarify and improve this complex rule. If you have further questions or would like to discuss this letter in more detail, please feel free to contact me at 202-508-3630.


Andrew T. Price
Sr. Director of Advocacy & Counsel

About CUNA

Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 135 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit To find your nearest credit union, visit


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