A pair of U.S. senators, a Democrat and a Republican, have introduced legislation that would give lenders a grace period for new integrated disclosures.
The Consumer Financial Protection Bureau
last month disclosed its intention to push the implementation date for new disclosures required under the the Truth in Lending Act and the Real Estate Settlement Procedures Act to Oct. 3.
But the implementation does not provide for testing the process before hand and requires use of old forms until the implementation date, according to a letter from a group of 20 trade associations
that includes the American Bankers Association, the Consumer Mortgage Coalition and the Mortgage Bankers Association.
“Stakeholders are rewriting business processes, upgrading software and training staff to comply with the 1,888-page regulation,” the letter states. “Unfortunately, stakeholders are not able to test the processes used to develop these new disclosures in real-life transactions before the implementation date.”
To give lenders some leeway on getting the TRID implementation right, H.R. 2213 was previously introduced in the House.
Now, a companion Senate bill
provide a reasonable hold-harmless period through Dec. 31 — S. 1711 — has been introduced by
Sen. Tim Scott (R-South Carolina) and Sen. Joe Donnelly
The trade groups said that a formal hold-harmless period will give stakeholders the ability to make a good faith effort to comply with TRID while not fearing potential regulatory enforcement or litigation.
The American Land Title
Association, which was among the associations to sign the letter, issued a separate statement praising Scott and Donnelly for introducing the bill.
“Without certainty, service providers are likely to close fewer transactions to ensure compliance with TRID, which will delay homeownership for consumers around the country,” ALTA Chief Executive Officer Michelle Korsmo said in the statement. “ALTA members support S. 1711, and its companion bill H.R. 2213 in the House, for creating a definitive hold-harmless period to ensure industry has the time needed to properly implement this new regulation while delivering the service and closing experience that homebuyers deserve.”