CUNA letter to CFPB on TRID
July 6, 2015
Office of the Executive Secretary
Consumer Financial Protection Bureau
1275 First Street NE
Washington, DC 20002
Re: Docket No. CFPB-2015-0029, RIN 3170-AA48
Integrated Mortgage Disclosures Rule Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) and Amendments
Filed via e-mail: FederalRegisterComments@cfpb.gov
Dear Ms. Jackson:
The Credit Union National Association (CUNA) appreciates the opportunity to submit comments concerning the Consumer Financial Protection Bureau’s (CFPB) proposed rule delaying the effective date of the Integrated Mortgage Disclosures Rule Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) (TILA-RESPA Final Rule) and the related Amendments (TILA-RESPA Amendments). CUNA represents America’s credit unions and their more than 100 million members.
I. The Rule as Proposed
As expressed in previous communications, CUNA appreciates CFPB’s consideration of an extension of the effective date to October 3, 2015. CUNA believes the additional two month period is a step in the right direction to allow for an orderly transition to the new regulatory regime. In particular, the extension is welcome given that the current effective date falls during the summer months which is the busiest time of the year for many credit unions. We would however continue our ongoing call to implement a safe harbor for legal liability and enforcement until the end of the year to allow for proper transition to the new regulatory regime. We believe this is appropriate given the magnitude of changes requested by the CFPB.
II. Alternative Dates for Extension
CFPB has requested comments on alternative dates for extension, including the prospect of allowing the new rules to take effect on the CRA Effective Date (earliest August 15, 2015). The CFPB acknowledges in the proposed rule that any change in the rule, including the proposed delay of the effective date, will cause a financial institution to incur costs. We agree with this assessment and as such request the CFPB extend the date to January 1, 2016 (together with a corresponding safe harbor for legal liability and enforcement beyond the effective date).
We note that many credit unions will need to run dual tracks during the transition to provide for those loans whose applications are received before the effective date versus those received after the effective date as provided in the rule. Allowing the industry ample time to properly plan for compliance with this major rule will be crucial to ensure proper implementation. This transition will be cumbersome for most, so any additional time will greatly benefit the industry, minimize costs, and provide a smooth transition to the new regulatory regime.
III. Discrepancy in CFPB’s Small Entity Compliance Guide and Supplemental Information
As expressed in our June 19, 2015 letter to the CFPB, CUNA continues its request to the CFPB to confirm that creditors that make five or fewer mortgages per year, as outlined in the rule’s supplementary information and the September 2014 Small Entity Compliance Guide, are exempt from the TILA-RESPA rule. Now that the effective date has been extended, there is adequate time to correct the inconsistency between the text of Regulation Z and the September 2014 Small Entity Compliance Guide and the supplementary information. We urge the CFPB to address this issue so that the lending operations of credit unions are not negatively impacted and members can continue to receive financial services to meet their needs.
IV. Effective Date
Section 5, Page 10 of the proposed rule discusses making the effective date of the rule take effect immediately upon publication in the Federal Register. While we believe this reference is to the technical APA requirements of rule promulgation, it is nonetheless confusing. We hope the CFPB takes efforts to clarify that although the rule may take effect immediately upon publication in the Federal Register, compliance with the substance of the rule is not required until October 3, 2015 (or whatever date is ultimately set by the CFPB).