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CFPB Delays Mortgage Disclosures to October 1

The Consumer Financial Protection Bureau (CFPB) has announced a two-month delay of a new rule, which would combine two mortgage disclosure regimes—the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). The news broke during the Missouri Credit Union Association’s (MCUA) statewide training seminar that addressed TILA-RESPA (also known as TRID).

“This additional two-month period would afford credit unions more time to ensure they comply with this complex rule,” says John Thomas, MCUA SVP of Regulatory Compliance. “Attendees of the TILA-RESPA training have the opportunity to implement what they have learned before the rule goes into effect and the new forms can be used.”

The integrated disclosure’s was scheduled to take effect August 1. The new effective date is set for October 1, 2015. The CFPB attributes the delay to an administrative error.

“We made this decision to correct an administrative error that we just discovered in the meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” says Richard Cordray, CFPB Director. “We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition of the new school year at that time.”

Trade groups, including the Credit Union National Association, the National Association of Federal Credit Unions, and nearly 300 members of Congress, have asked the CFPB to delay the rule or offer a grace period. 

“The extension will undoubtedly be helpful for consumers and businesses as it allows more time for enhanced collaboration and proper implementation by the CFPB; however, today’s announcement falls short of instituting the formal hold harmless period sought by nearly 300 Members of the House and Senators,” says U.S. Rep. Blaine Luetkemeyer (R-District 3), who serves on the House Financial Services Committee.  “The need for this extension is a reminder to all of us that we are human beings and mistakes are made, and I appreciate Director Cordray’s actions to remedy the situation. It is my sincere hope that CFPB is as understanding of any errors made at the closing table in the months following final TRID (TILA-RESPA Integrated Disclosure) implementation.”

According to the CFPB, the proposal will be issued for public comment and a final decision is expected shortly thereafter.