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TRID Implementation Goes Live and CFPB Promises No Punitive Enforcement

October 5, 2015 – Despite the Community Bankers Association of Illinois’ (CBAI) urging for a delayed implementation, the new TILA RESPA (TRID) rule took effect on Saturday, October 3, 2015. In several comment letters to the Consumer Financial Protection Bureau (CFPB or Bureau) CBAI also called for a period of restrained enforcement and liability as vendors and lenders make the complicated transition to the TRID. While these repeated calls did not result in a formal grace period, these efforts none-the-less had a favorable impact on community banks in the implementation of the rule.

CFPB Director Richard Cordray stated that the Bureau is working with other regulators on examination guidance to help ensure that the agencies enforce the new mortgage disclosures in a “corrective’ manner and not a “punitive” one. Cordray pledged lenders making a good-faith effort to implement the disclosures will have “some period of months” to work out any problems. “There will be time for them to get it right. They don’t have to be perfect the first day.” Cordray said.

Cordray stated that during the initial examinations for compliance, the regulators will evaluate the institution’s compliance management program and overall efforts to come into compliance. “Specifically, examiners 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.”

These concessions are meant to address industry concerns about regulatory enforcement; and while not a perfect solution, CBAI thanks the CFPB for the accommodation and additional guidance. Unfortunately, the CFPB did not sufficiently address concerns about potential liability, in the form of law suits, which could result from noncompliance. As a result, CBAI will continue to support legislation to implement a reasonable hold-harmless period for good-faith efforts to comply with the TRID. Summary of TRID Rules. CFPB’s TRID Implementation Webpage