CFPB to institute ‘hold harmless’ period when TRID takes effect

CFPB to institute ‘hold harmless’ period when TRID takes effect

The Consumer Financial Protection Bureau is instituting a hold-harmless period during the initial implementation of the Know Before You Owe TILA-RESPA Integrated Disclosure rule, wrote CFPB director Richard Cordray in a letter to the industry obtained by Federal Title.

The letter does not specifically state how long the hold-harmless period will last. Cordray noted in the letter CFPB’s approach is similar to the one it took to enforce mortgage rules that went into effect in January 2014, adding that the hold-harmless approach was successful at that time in making the transition to new regulations a bit smoother.

“During initial examinations for compliance with the Rule, the agencies’ examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance,” Cordray said in the letter.

The letter went to the heads of several groups in the mortgage and real estate industry, including the American Land Title Association, the National Association of REALTORS and the American Bankers Association, and is a response to their efforts to delay implementation of TRID.

“We recognize that the mortgage industry has dedicated substantial resources to understand the requirements, adapt systems, and train affected personnel, and that additional technical and other questions are likely to be identified once the new forms are used in practice after the effective date,” Cordray said in the letter.

While TRID is slated to go into effect October 3, ALTA and others continue to support legislative action to extend the hold-harmless period to February 1, 2016 and provide relief from civil liability, said ALTA CEO Michelle Korsmo in an announcement sent to members last night in response to Cordray’s letter.

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