The CFPB recently issued a request for information (RFI) on the Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) rule, the right of rescission under TILA, and reverse mortgages. Comments are due by August 10, 2026.

The RFI is based on the March 2026 Executive Order (EO) 14393 entitled “Promoting Access to Mortgage Credit”. The EO focuses on promoting mortgage originations by community banks and banks with less than $100 million in assets. After addressing the general goals of the EO, the CFPB quotes the EO provision directing it to “consider, as appropriate and consistent with applicable law:

(i) proposing amendments to Regulation Z that tailor the following requirements for smaller banks: [ability to repay] and [qualified mortgage (QM)] requirements (including potentially a broader QM safe harbor for portfolio loans) and the requirements of the Truth in Lending Act . . ., Real Estate Settlement Procedure[s] Act, . . . and [TRID rule];

(ii) replacing TRID timing rules with a materiality-based standard that preserves consumer clarity and reduces closing delays; [and]

. . . .

(vii) exempting rate-and-term refinancing (including cash-out refinancing) from rescission rights.”

However, the CFPB states that it “recognizes certain regulations may contribute to higher costs for borrowers needing access to mortgage credit.” As a result, most of the requests for comments on issues are not specifically related to smaller banks.

TRID Rule

The CFPB observes that in November 2019 it published a request for information “as part of its assessment of the TRID Rule’s effectiveness and invited the public to submit comments and information on a variety of topics” and that in October 2020 it issued its TRID Rule Assessment Report that describes the comments and summarizes the information received. The CFPB then summarizes various aspects of the TRID rule, including the initial and revised Loan Estimate requirements and related timing and waiting period requirements, the limitations on the ability of a creditor to increase certain charges (which are referred to as “tolerances”) without a changed circumstance that permits an increase beyond the limitations, and the Closing Disclosure requirements and related timing and waiting period requirements. (The tolerances are addressed below.)

Timing Requirements. Under the TRID rule, a creditor must issue a Loan Estimate that details the estimated loan terms and settlement charges, and that is subject to the tolerances on the ability to increase various charges that are disclosed, within three business days after the creditor has received only six items of information. The items are the consumer’s name, income, social security number (to obtain a credit report), the property address, an estimate of the value of the property, and the mortgage loan amount sought. Upon learning of a changed circumstance that permits an increase in one or more settlement charges beyond the applicable limits, a creditor has three business days to issue a revised Loan Estimate with the increased charge(s).

A consumer must receive a Closing Disclosure with the final loan terms and settlement charges at least three business days before consummation. Any changes must be reflected in a revised Closing Disclosure provided at consummation. However, if the changes result in the previously disclosed annual percentage rate (APR) becoming inaccurate under Regulation Z, the consumer must receive a revised Closing Disclosure with updated information at least three business days before consummation (which may require a delay in consummation).

Addressing the TRID rule timing requirements for the Loan Estimate and Closing Disclosure, the RFI includes the following questions:

  • Question 1. Do the timing requirements materially affect consumers’ ability to obtain mortgage credit? If so, in what ways and to what extent is credit availability affected?
  • Question 2. Do the timing requirements increase costs for mortgage brokers, creditors, or consumers? If so, do these costs outweigh any benefits to consumers provided by such timing requirements? If so, how do these costs compare to the costs of implementing changes to the timing requirements?
  • Question 3. Are there certain transaction types or specific scenarios that are inhibited or complicated by the timing requirements?
  • Question 4. Are there opportunities to provide initial Loan Estimates earlier in the mortgage origination process to meet the statutorily required waiting periods while allowing consumers time to shop and reducing closing delays?
  • Question 5. Are there ways to reduce the incidence of revised disclosures being issued while providing consumers with timely updates to settlement costs and avoiding closing delays?
  • Question 6. Are there opportunities to provide Closing Disclosures earlier in the mortgage origination process to meet the statutorily required waiting periods while allowing consumers time to understand loan costs, prepare for loan consummation, and avoid closing delays?
  • Question 7. What additional guidance or model forms could the CFPB issue to better facilitate consumers’ decision to waive the statutorily required waiting periods for a bona fide personal financial emergency?
  • Question 8. Are there any materiality-based standards that could replace or supplement timing rules, recognizing TILA’s timing requirements for delivery of disclosures after application and before consummation—including issuance of a revised disclosure upon a change in APR above the prescribed tolerance? If so, how should CFPB consider defining and structuring these standards (e.g., as an optional supplement to TILA’s timing requirements or a complete substitution for them)? Would these materiality-based standards result in improved administrative efficiencies while preserving or improving consumer clarity and reducing closing delays?

The assessment of the timing requirements must account for the TRID rule requirement that a creditor issue a detailed Loan Estimate subject to tolerances on the ability to increase various charges based on scant information. One example of the absurd limitations on the information that the creditor may require before issuing a Loan Estimate is that with a purchase money loan the property address item would not be the consumer’s existing residence, and the creditor would have to issue a Loan Estimate if it received the other five items without being allowed to require that the consumer provide their contact information where the creditor can send the Loan Estimate. (Yes, the creditor can ask consumers to voluntarily provide contact information and typically consumers will do so, but the fact the TRID rule allows for such a bizarre result should be addressed.)

If creditors could require more information before issuing a Loan Estimate, including basic items such as the type of loan the consumer wants, the term to maturity, whether the home would be a primary or secondary residence and other important factors, they could provide more accurate Loan Estimates, reduce the need to provide revised Loan Estimates and reduce the risk of disclosing charges that are not accurate.

Tolerances. Under the TRID rule, certain charges disclosed in the initial Loan Estimate may not increase without a changed circumstance that permits the creditor to increase the charge. This is referred to as the “zero percent tolerance” and includes government transfer taxes and charges paid to the creditor, a mortgage broker, an affiliate of the creditor or mortgage broker, and an unaffiliated third party if the creditor did not permit the consumer to shop for the provider of the third-party service consistent with the TRID rule.

The aggregate amount of recording fees and the following third-party charges may increase by no more than ten percent absent a changed circumstance that permits a greater aggregate increase: the charge for the third-party service is not paid to the creditor or an affiliate of the creditor, the creditor permits the consumer to shop for the third-party service consistent with the TRID rule and the consumer either does not select a provider for the service or selects a provider identified by the creditor on a list that the creditor must provide to the consumer.

The estimates of the following charges may increase without a percentage limit, although the creditor must estimate the charges based on the best information reasonably available: prepaid interest, property insurance premiums, amounts placed into an escrow, impound, reserve, or a similar account, charges paid to third-party service providers that the consumer selected and were not disclosed on the required list that the creditor provided to the consumer, property taxes, and fees paid for third-party services not required by the creditor.

Addressing the TRID rule tolerances, the RFI includes the following questions:

  • Question 10. Are there adjustments to the tolerance thresholds that could improve loan execution and result in improved credit access and lower consumer costs? For example, are there instances where the CFPB should consider adjusting tolerances for transfer taxes because transfer taxes cannot be determined within three business days of application?
  • Question 11. Is there additional guidance that CFPB should provide around changed circumstances, which result in the issuance of revised estimates? For example, should the CFPB consider providing additional guidance around changed circumstances in cases where a purchaser continues to negotiate with the seller for payment of charges customarily paid by the borrower?

The assessment of the tolerances must account for the fact that the tolerances are beyond the authority of the CFPB to impose under TILA and RESPA. Full stop. Both statutes simply provide for estimates of fees in good faith. Good faith does not mean exact or being subject to a ten percent limit. It means good faith. The CFPB should be cognizant of this important fact when assessing the current tolerances.

Transfer taxes should not be in the zero percent tolerance category. The CFPB simply followed the approach taken by the U.S. Department of Housing and Urban Development when it revised Regulation X under the RESPA in November 2008 to add the concept of tolerances. We understand that HUD placed transfer taxes in the zero percent tolerance category based on the belief of a HUD official that creditors always know the amount of the transfer taxes upfront. However, our understanding is that such belief was based on creditor practices at the time with loans on multi-family properties, where the transfer taxes can be quite substantial and creditors would determine the amount early in the loan process. That was not the practice in the single-family mortgage loan industry, and the inclusion of transfer taxes in the zero percent tolerance category continues to present operational burdens for creditors.

Miscellaneous. The RFI also includes the following questions regarding the TRID rule:

  • Question 12. Should the TRID disclosure forms be modified in a way that would improve clarity for consumers and loan execution for mortgage brokers or creditors?
  • Question 13. Is there additional guidance that CFPB should provide regarding the acceptability of electronic or digital forms and signatures that would promote their use and lower costs for consumers?
  • Question 14. Are there changes or clarifications to requirements specific to construction loans that would provide consumer clarity, reduce costs, or otherwise promote access to credit for the construction of residential housing? For example, should the CFPB waive certain requirements as the CFPB did when it issued a “Trial Disclosure Program Waiver Template” to the Independent Community Bankers of America (ICBA) covering the ICBA’s alterative versions of the Loan Estimate and Closing Disclosure tailored to construction loans?
  • Question 15. Are there other changes to the TRID Rule that CFPB should consider to facilitate compliance with the disclosure requirements of TILA and RESPA and to aid the consumer in understanding the transaction?

Observation. The TRID rule is far from perfect and can be improved. However, creditors and other industry members spent enormous sums of money to implement the TRID rule and subsequent revisions to the rule. Many industry members will likely oppose changes to the rule that would require significant additional implementation expenditures unless the changes provide regulatory relief that will materially reduce operational burdens and costs.

Right of Rescission

Under TILA, for certain mortgage loans, such as refinance loans on a consumer’s principal dwelling, the consumer has the right to rescind the transaction within three business days after consummation for any reason or no reason. The three-business day right to rescind was intended to provide the consumer with a cooling off period to assess if they are satisfied with the mortgage loan transaction in view of the fact that the final disclosures under the original TILA mortgage disclosure regime were provided at consummation. As noted, under the TRID rule the consumer must receive the Closing Disclosure at least three business days before consummation.

The combination of the TRID rule requirement that the consumer receive a Closing Disclosure at least three business days before consummation and the consumer’s right under TILA to rescind certain transactions within three business days after consummation presents the issue of whether any transactions currently subject to both requirements should be exempt from any of the requirements, such as refinance loans that simply provide for a reduction in the interest rate on the consumer’s current loan. The need for the rescission right cooling off period is much less important when a consumer receives the Closing Disclosure at least three business days before consummation, and the combination of both the TRID rule and TILA requirements effectively delays the implementation of the lower interest rate.

The RFI addresses this issue in the following question:

  • Question 9. Does the three-business-day post-consummation rescission waiting period, coupled with the three-business-day pre-consummation TRID waiting period, unduly delay loan funding for refinance transactions? If so, how could the CFPB adjust the right of rescission or TRID waiting periods?

Reverse Mortgages

The CFPB observes that reverse mortgage loans are not subject to the TRID rule, but are subject to the Good Faith Estimate and HUD-1 Settlement Statement requirements under RESPA and the disclosure statement and specific reverse mortgage disclosure requirements under TILA. The required disclosures vary based on whether the reverse mortgage is structured as closed-end or open-end credit. The disclosure requirements are far from integrated and streamlined.

The RFI includes the following questions regarding reverse mortgages:

  • Question 19. The CFPB is aware that the reverse mortgage industry faces significant difficulties applying the disclosure requirements of TILA and RESPA to reverse mortgages, in light of those transactions’ unusual terms and features. Would integrated and tailored reverse mortgage disclosures enable consumers to make more informed decisions?
  • Question 20. Would a different set of scenario assumptions in the calculation of total annual loan cost rates in the [Total Annual Loan Cost (TALC)] table give consumers more reasonable and accurate likely cost estimates of reverse mortgages?
  • Question 21. Would a table that demonstrates how the reverse mortgage balance grows over time, using dollar amounts rather than annualized loan cost rates in the current TALC table, help consumers to better understand and evaluate the costs and the benefits of the reverse mortgage? If so, what are the important features of such a chart?
  • Question 22. Would consumers benefit from a tailored disclosure informing consumers about how reverse mortgages work and about terms and risks that are important to consumers when selecting a reverse mortgage, instead of the generic brochures and booklets? If so, please provide any research or analysis of material that would be beneficial.

The reverse mortgage loan disclosure requirements were shoehorned into the TILA and RESPA disclosure regimes and need to be integrated and streamlined to provide for simplified and concise disclosures, particularly given that the applicants for such loans are elderly. However, based on the enormous amount of money spent by the industry to implement the TRID rule, implementation costs and other burdens need to be considered in connection with any revisions of the reverse mortgage disclosure requirements.

Small Banks and Credit Unions

Addressing the focus of the EO on community banks and banks with less than $100 million in assets, the RFI includes the following questions:

  • Question 17. Are there unique aspects of the loan origination process performed by small banks and credit unions for which the CFPB should consider changes to the TRID Rule specifically tailored for small banks and credit unions? If so, how should CFPB consider structuring these tailored changes (e.g., exemptions or alternative requirements)?
  • Question 18. Would changes exclusive to small banks and credit unions lower costs for originators, creditors, or consumers?