Preview of proposed changes to CFPB’s TRID rule

The Consumer Financial Protection Bureau (CFPB) recently decided to revisit the TILA-RESPA Integrated Disclosure rule (TRID), also known as “Know Before You Owe.” League sources have provided a summary of proposed changes to the rule that may be useful to credit union lending and compliance staff. The CFPB is requesting comments by Oct. 18, 2016.

CFPB has now published a proposed rule to formalize guidance under TRID and “provide greater clarity and certainty” to the rule’s requirements.

Many industry participants have noted that the TRID rule had caused operational and compliance challenges that affected lenders’ ability to make loans, as well as investors’ ability to purchase loans. After considering extensive feedback from market participants, the CFPB has issued limited proposed changes that addresses some (but not all) of these concerns.

The CFPB’s proposed changes include:

  • Creating a tolerance for the Total of Payments calculation. These tolerance provisions would parallel existing tolerances for the finance charge and disclosures affected by the finance charge.
  • Clarifications explaining how the TRID rules apply to construction loans. This proposed commentary builds on a webinar provided by CFPB staff held on March 1, 2016.
  • Technical fixes and clarifications to the Cash to Close and Projected Payments tables, escrow account disclosures, rounding provisions, and various other technical provisions.
  • Amending the scope of the TRID rule to clarify that it covers loans secured by cooperative units, regardless of whether the cooperative is treated as real property under state law.
  • Clarifying how a creditor may provide separate Closing Disclosures to the consumer and the seller to address privacy issues.
  • Expanding the exemption for down payment assistance and similar subordinate lien loans often made by housing finance agencies, non-profits, and similar entities.