July 27, 2015

CFPB Formally Delays the TILA-RESPA Final Rule (TRID) Effective Date

2 min

On July 21, 2015, the CFPB formally delayed the effective date of its Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) (TILA-RESPA Final Rule or TRID) and TILA-RESPA Amendments. The final rule adopts the CFPB June 24, 2015 proposal to delay the effective dates of TRID and the Amendments. The Bureau reiterated its concern that a longer delay in implementation would impose unnecessary costs on both consumers and the segments of industry working to implement the final rule.

Key Takeaways:

  • The delay is now official and will be codified in the Federal Register.
  • The CFPB highlighted that the compliance date (October 3, 2015) is a Saturday, which should help lenders migrate systems over the weekend.
  • The CFPB again declined to define a formal "grace period" or an official "hold harmless" period that would protect lenders from all liability, including civil liability.
  • Without a formal grace period, secondary market purchasers are without legal protection once the rule takes effect, and can be expected to remain risk averse and conservative.
  • Despite the lack of a formal grace period, the Bureau has not altered its position on providing an unofficial period of "taking good faith efforts to apply into account" after the effective date passes.
  • The Bureau declined to provide additional time past October 3, 2015.

Additionally, the CFPB officially declined to allow a "dual compliance" period during which creditors would have the option of using the new forms. In keeping with the Bureau's established approach, its denial of a dual compliance period confirms the seriousness with which it considers lenders' ability to shop and compare Loan Estimates (LEs). Through its holistic approach, the Bureau seeks to address issues that may arise from consumers attempting to compare loans via different forms. The Bureau also considered the difficulties that a dual compliance period could place on vendors, secondary market purchasers, and regulators.