The Consumer Financial Protection Bureau (CFPB) issued a final rule postponing the effective date for all provisions of the TILA-RESPA Final Rule and Amendments to October 3, 2015. “TILA” stands for Truth in Lending Act and “RESPA” stands for Real Estate Settlement Procedures Act. This new regulation promulgated by the CFPB is often described as the “Know Before You Owe” mortgage disclosure rule, also known as TRID (an amalgam of TILA and RESPA). TRID is aimed toward making mortgages more transparent and easier to understand for consumers, but there will definitely be a learning curve for consumers and professionals in the real estate industry.
In addition to notifying the industry of the delay in the full effect date, the CFPB made two technical changes to the TILA-RESPA Final Rule that were not in the proposed rule. Specifically, the final rule amends § 1026.38(i)(8)(ii) and (iii)(A) to include, in the amount disclosed as “Final” for Adjustments and Other Credits, the amount disclosed under § 1026.38(j)(1)(iii) for certain personal property sales in order to conform the calculation of Adjustments and Other Credits on the Closing Disclosure and Loan Estimate, according to an article published by Marc Patterson on JDSupra. The final rule also attempts to conform the disclosure of a borrower’s cash to close by amending § 1026.38(j)(1)(iv) to include, in the amount disclosed as Closing Costs Paid at Closing, lender credits disclosed under § 1026.38(h)(3).
Richard Cordray, Director of the CFPB, stated that the additional time provided by the new October 3, 2015 effective date will help consumers and providers whose families are likely busy with the transition to the new school year. Director Cordray also stated that the CFPB did not want to unduly burden creditors who had limited time to fully test all of their systems and system components to ensure that each system works with the others in an effective manner due to some technical errors discovered by the CFPB.