The CFPB sent industry trade groups a letter on October 1, 2015 to address the approach of the FFIEC member agencies during the initial months following the implementation of the TILA-RESPA Integrated Disclosure (TRID) rule on October 3, 2015. In the letter, the CFPB noted that it and the other FFIEC member agencies recognized the implementation challenges presented by the TRID rule and the significant efforts made by the industry to implement the rule. Notably, the letter acknowledges that “additional technical and other questions are likely to be identified once the new forms are used in practice after the effective date.”
The CFPB advises that during initial examinations for TRID rule compliance, examiners will look at an institution’s compliance management system and its overall efforts to comply. The CFPB also advised that examiners will expect institutions to make good faith efforts to comply in a timely manner, and will consider the institution’s implementation plan, including actions taken to update policies, procedures and processes; its training of appropriate staff; and, its handling of early technical problems or other implementation challenges.
As we previously reported earlier this year, the CFPB stated that it would be sensitive to the progress made by institutions that have squarely focused on making good faith efforts to come into compliance with the TRID rule on time. In 2013, the CFPB made a similar statement regarding its approach to assessing compliance with the mortgage rules that became effective in January 2014, as we reported.
Fannie Mae and Freddie Mac (collectively, the “GSEs”) also released guidance to their sellers explaining that they expect lenders to make good faith efforts to comply with the TRID rule in a timely manner as well. While the GSEs will evaluate whether a lender used the correct forms, until further notice, the GSEs will not conduct routine post-purchase loan file reviews for technical compliance with the TRID rule during this transitional period. However, the GSEs also advised that they will exercise contractual remedies, including repurchase, in the following two “limited circumstances”: (1) the required form is not used, or (2) if a particular practice would impair enforcement of the note or mortgage or would result in assignee liability, and a court of law, regulator or other authoritative body has determined that such practice violates the TRID rule. Fannie Mae also indicated that it will post FAQs on its website that will answer additional questions about the TRID rule.
The efforts of the CFPB and other FFIEC member agencies fall short of requests by the industry that institutions who have acted in good faith to implement the TRID rule be protected from legal liability for a transitional period. As we have described, H.R. 3192, entitled the “Homebuyers Assistance Act,” would provide a hold harmless period for the TRID rule until February 1, 2016. The bill provides that a suit cannot be filed for violations of TRID before then as long as good faith efforts are made to comply. H.R. 3192 passed in the House on October 7, 2015 and will be reviewed by the Senate.