On Wednesday evening, the House passed two regulatory relief bills are aimed at benefiting both consumers and lenders.
The TRID Improvement Act of 2017 is aimed at modifying requirements related to mortgage disclosures, especially title insurance, and offers clarification to consumers and regulatory relief to financial institutions. The final vote was 271-145, with 228 Republican votes in favor.
On the other hand, the Protecting Consumers’ Access to Credit Act touches the Home Owners’ Loan Act, the Federal Credit Union Act, and the Federal Deposit Insurance Act by amending them to require the rate of interest on certain loans remain unchanged regardless of whether a bank has subsequently sold or assigned the loan to a third party.
“These bills are common-sense pieces of regulatory relief legislation that provide great benefits to consumers while minimizing the burdens facing credit unions and other financial institutions,” said Ryan Donovan, Chief Advocacy Officer at Credit Union National Association (CUNA). “We’re pleased to see them move forward and will continue our work to move these bills along in the process.”
The TRID Improvement Act was introduced in the House in late 2017 by Congressman French Hill (R-Arkansas) and Ruben Kihuen (D-Nevada) in a bipartisan effort to address issues related to title insurance.
“Consumers deserve to know the costs of their title insurance premiums when they purchase a home. As TRID has become a massive, complex rule, it is hindering financial institutions’ ability to share accurate information to consumers during the mortgage closing process,” Hill had said while introducing the Bill. “This legislation seeks to correct this error by ensuring that consumers know the exact cost of their title insurance—not the number reported as one price on a lending estimate and another price on a closing document.”
Hill added that homebuyers were not receiving accurate disclosure of their title insurance premiums because the Consumer Financial Protection Bureau (CFPB) "does not allow the calculation of a discounted rate known as ‘simultaneous issue,’ which is a rate title insurance companies provide to consumers when they purchase a lenders and owners title insurance policy simultaneously.”
In October 2017, an assembly of trade groups sent a letter to the House of Representatives in support of the bill. The letter's signatories included the Mortgage Bankers Association, the American Bankers Association, the National Association of Home Builders, and many others. The letter read, in part, "H.R. 3978 would reduce [homebuyer confusion] by allowing title insurance companies to disclose available discounts and accurate title insurance premiums to consumers. This straightforward fix would benefit consumers across the country.”
The new Bill will affect the Real Estate Settlement Procedures Act (RESPA) under amendment H.R. 3978 and would require the CFPB to allow the accurate disclosure of the title insurance premiums and any other available discounts to homebuyers.
The Protecting Consumers’ Access to Credit Act provides amendments to the Federal Credit Union Act under H.R. 3299 would require state loans with a maximum rate of interest, in accordance with federal law, to remain valid, even if a bank or loan has been sold to a third party.