CFPB Issues Letter to Congress to Allow Enforcement Grace Period
On May 20 2015, a letter was sent by Congress to Richard Cordray, Director of the Consumer Financial Protection Bureau, asking for the grace period through the end of 2015, claiming the industry was not prepared for the rule’s implementation. The letter was signed by 255 Members of Congress.
To read the letter and see all 255 handwritten signatures, click on the link below:
Letter from Congress to CFPB
June 3, 2015, CFPB Director Richard Cordray issued a response letter to Congress stating that the Bureau will allow a grace period after the Truth in Lending Integrated Disclosures (TRID) rules go into effect on August 1st.
To read the response letter, click on the link below:
Letter from CFPB to Congress
Earlier in May, the House passed H.R. 2213, introduced by the New Mexico Republican Congressman Steve Pearce Republican and California Democrat Brad Sherman. The bill would prevent enforcement of TRID and the filing of any related lawsuit as long as the following are met:
- A good-faith effort has been made to comply with the requirements; and
- The conduct alleged to be in violation of the requirements occurred on or before Dec. 31, 2015, thus allowing stakeholders and the CFPB to test the effective operation of the rule.
On May 13, 2015, Executive Vice President of the American Bankers Association (ABA) Robert Davis sent a letter to Mr. Cordray at the CFPB stating that the ABA had completed a survey. The letter included the results of the survey which showed that while 74% of banks are using a vendor or consultants to assist with TRID implementation, only 2% of the compliance systems had been delivered by the month of April. Nearly eight in 10 banks (79%) couldn’t verify a precise delivery date or were told they wouldn’t receive systems before June.
To read the ABA Survey, click on the link below
link: ABA Member Survey on Vendor Readiness for TRID
A recent survey conducted by Capsilon Corp., found that 41% of mortgage lenders report that they are not prepared to meet the August deadline to comply with TRID. The survey also revealed that four out of five of the respondents believe that their mortgage origination costs will increase after TRID and two-thirds of the lenders reported that they hired additional staff or outside consultants in order to deal with the new regulations.
At the recent MBA Secondary Market Conference in New York City, the MBA economists reported that total loan production expenses increased to $7,000 per loan as of the 4th quarter of 2014. By contrast, the cost to originate a mortgage in the 4th quarter of 2012 was less than half, at $3,324 per loan.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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