CFPB Announces Two-Month Delay in Mortgage Disclosure Rule

The Consumer Financial Protection Bureau announced June 17 that it will be issuing a proposed amendment to delay the effective date of the “Know Before You Owe” rule until October 1.

 The implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure regulation, or TRID, which gave consumers three days to look over closing loan documents, was originally set to go into effect on Aug. 1.

Both mortgage industry stakeholders (servicers in particular) and lawmakers have been asking the CFPB to delay the implementation of TRID for months.

“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” CFPB director Richard Cordray said in a statement.

“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 to the new school year at that time.”

Patrick Curry, CEO of Waco Title Co. of Springdale, said the action by the CFPB is surprising but welcome news. Curry has long advocated the need to avoid implementing the new regulation during the peak summer selling season.

“The implementation date of Aug. 1 was always an awkward start date and is at the height of the home-buying season for families looking to relocate before the start of the school year,” he said. “Delays during August and September could cause issues that would impact families more than any other time during the year. 

“Waiting until Oct. 1 will allow for the high season of home buying to pass and allow for a much better transition period. While we were prepared for an Aug. 1 date, this will allow for much more training and communication in our industry and a much smoother transition.”

Curry also commended Arkansas’ congressional delegation for expressing concerns on behalf of the title and real estate industry.

“They were all supportive and were actively working to put pressure on the CFPB to look at the implementation date of Aug. 1 and allow for concessions on either the implementation date or enforcement period,” Curry said. “This was a great example of consumers and constituents reaching out to their representatives and making a change in government process that will impact us all greatly.”

The public will have an opportunity to comment on the CFPB proposal and a final decision on the TRID rule is expected shortly thereafter.