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Special Alert: CFPB Issues Statement on TRID Enforcement

Special Alert

Jeremiah S. Buckley, John P. Kromer, Jeffrey P. Naimon

On June 3, CFPB Director Cordray responded to requests from industry and members of Congress for delayed enforcement of the Bureau’s TILA-RESPA Integrated Disclosure (“TRID”) rule, which will take effect for applications received on or after August 1, 2015. The Bureau did not, as many had hoped, delay the effective date or establish a “hold harmless” period during which the rule would be in effect but public and private enforcement would be limited.

Instead, Director Cordray stated that he had spoken with other regulators “to clarify that [the Bureau’s] oversight of the implementation of the [TRID] Rule will be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the Rule on time.” As noted in Director Cordray’s letter and a related CFPB blog post, this is consistent with the approach applied by the Bureau in early 2014 after the Ability-to-Repay/Qualified Mortgage Rule, Mortgage Servicing Rules, revised Loan Originator Compensation Rule, and other regulations implementing Title XIV of the Dodd-Frank Act took effect. Director Cordray noted that, in the Bureau’s view, this approach “has worked out well.”

The Bureau stated in its Winter 2015 Supervisory Highlights that “[m]ost of the Title XIV rules took effect in January 2014 and the CFPB commenced supervisory examinations for compliance four months after the effective date.” The Bureau’s statements, while helpful in understanding its general approach to supervision and enforcement under the TRID rule, do not provide guidance on what constitutes “good-faith efforts to come into compliance.” Instead, as with the Title XIV rules, this will be determined by the Bureau on a case-by-case basis. Furthermore, the “good-faith efforts” standard will not apply in actions brought by borrowers to enforce the provisions of the TRID rule that carry a private right of action.

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