Senators Urge CFPB to Institute Grace Period for TRID

EDITOR'S NOTE: This article originally published May 21, 2015, by the American Land Title Association (ALTA) and is reposted here with permission.

Two U.S. Senators have joined the growing chorus encouraging the Consumer Financial Protection Bureau to enact a hold-harmless period through the end of the year following the August 1 effective date of the Consumer Financial Protection Bureau's (CFPB) TILA-RESPA Integrated Disclosures (TRID) regulation.

Sens. Joe Donnelly (D-Ind.) and Tim Scott (R-S.C.) sent a bipartisan letter to CFPB Director Richard Cordray urging the bureau to institute a grace period for companies working in good faith to comply with TRID. Several other Senators have co-signed.

"We appreciate the leadership of Senators Donnelly and Scott for supporting a hold-harmless period to help ensure we can properly implement the new real estate closing disclosures," said Diane Evans NTP, president of ALTA. "We know from previous regulation implementations that there will be a learning curve and unforeseen issues once the new forms are used in real homebuyer transactions. To ensure that consumers' real estate closings will not be disrupted beginning August 1, a hold-harmless period crucial."

"A hold harmless period will allow the real estate industry to adapt their business processes to comply with this regulation without the fear of potential enforcement actions. This will allow industry more flexibility in meeting homebuyer's needs as we transition to using the TRID forms in actual homebuyer transactions," Evans added.

Attendees of ALTA's 2015 Federal Conference and Lobby Day asked members of Congress to encourage the CFPB enact a hold-harmless period through the end of the year. Many members of Congress indicated they support a grace period for companies working in good faith to comply with TRID.

In the House, Reps. Andy Barr (R-Ky.)and Carolyn Maloney (D-N.Y.) also submitted a letter to the CFPB asking for a hold-harmless period. Additionally, a bill (H.R. 2213) introduced by Steve Pearce (R-NM) and Brad Sherman (D-CA) would provide a reasonable hold-harmless period through the end of the year following the Aug. 1 effective date of TRID. The bill would provide a temporary safe harbor from enforcement actions as long as companies show a good-faith effort to comply. There were 12 co-sponsors for the bill through May 15.

[Last update: 5-27-15]