Antitrust Law Daily Trade groups call on Financial Services Committee to pass TRID hold-harmless bill
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Wednesday, January 20, 2016

Trade groups call on Financial Services Committee to pass TRID hold-harmless bill

By John M. Pachkowski, J.D.

A diverse group of 19 financial services trade groups, led by the American Bankers Association, have called upon Rep. Jeb Hensarling (R-Texas), the Chairman of the House Financial Services Committee, and Rep. Maxine Waters (D-Calif), the Committee’s Ranking Member, to pass H.R. 2213.

The bill, introduced by Reps. Steve Pearce (R-NM) and Brad Sherman (D-Calif) would provide a reasonable hold-harmless period for enforcement of the of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) regulation for those lenders and settlement service providers that make good-faith efforts to comply. The TRID rule combines certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act and the Real Estate Settlement Procedures Act.

On June 3, 2015, the CFPB announced it will be sensitive to the progress made by those entities that make good-faith efforts to comply with the TRID requirements. The bureau took this action as a result of requests by Sens. Joe Donnelly (D-Ind) and Tim Scott (R-SC) and over 250 members of the House of Representatives calling for a grace period (see Banking and Finance Law Daily, June 3, 2015).

In their latest letter to Hensarling and Waters, the groups noted that a hold-harmless period helps ensure consumers’ real estate closings will not be disrupted after this complicated regulation’s Aug. 1, 2015, effective date.

They also added that, although the CFPB’s action was appreciated, the industry needs more certainty that their good-faith efforts to comply while still meeting consumers’ expectations does not expose lenders and settlement service providers to litigation during the initial period after the regulation becomes effective.

The industry groups first addressed the issue with the sponsors of H.R. 2213. In that letter, they noted there is concern about the ability to test the processes used to develop new disclosures before the implementation date (see Banking and Finance Law Daily, May 6, 2015).

Following the letter to Pearce and Sherman, the ABA issued an “urgent appeal” to the CFPB, asking the bureau to endorse a “hold harmless period of enforcement and liability” for institutions that, acting in good faith, are unable to comply with the TRID rule in time to meet the August 1 compliance deadline. The ABA based its request on a recent survey indicating that more than 20 percent of banks will be unable to meet the deadline (see Banking and Finance Law Daily, May 14, 2015).

Companies: American Bankers Association; American Bankers Insurance Association; American Escrow Association; American Land Title Association; Appraisal Institute; Community Home Lenders Association; Community Mortgage Lenders of America; Consumer Bankers Association; Consumer Mortgage Coalition; Credit Union National Association; Housing Policy Council of Financial Services Roundtable; Independent Community Bankers of America; Mortgage Bankers Association; National Association of Federal Credit Unions; National Association of Home Builders; National Association of Mortgage Brokers; National Association of Realtors®; Real Estate Services Providers Council, Inc. (RESPRO®); The Appraisal Firm Coalition

MainStory: TopStory CFPB DoddFrankAct Loans Mortgages RESPA TruthInLending

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