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Lawmakers Urge TRID Grace Period Before New Year

hands-writingThe Consumer Financial Protection Bureau's (CFPB) TILA-RESPA Integrated Disclosures rule (TRID) have been in effect since October 3, 2015, and despite the expected stumbles here and there, the rule has not caused any major catastrophes in the mortgage industry—just yet.

A bill introduced to ease the pressure of the new regulation, known as the Homebuyers Assistance Act (H.R. 3192), provides the mortgage industry with a grace period through February 1, 2016, by protecting them from enforcement actions if they make a good faith effort to comply with the TRID regulation.

Rep. French Hill (R-Arkansas), sponsor of the bill, noted that the legislation was brought about to allow for more clarity on the CFPB's TRID rule.

In addition, co-sponsor of the bill, Rep. Brad Sherman (D-California) stated, "the bill would help ensure access to mortgage credit during the hold-harmless period because it would allow small lenders to work toward full compliance without penalty."

The bill passed in House of Representatives (303-121) just shortly after TRID took effect in October, but has yet to reach the Senate.

The White House has already stated that is does not support the TRID grace period legislation and even threatened to veto the Homebuyers Assistance Act, according to a Statement of Administrative Policy

"The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders. The Administration strongly opposes H.R. 3192, as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the Nation’s financial stability," the White House wrote.

"If the President were presented with H.R. 3192, his senior advisors would recommend that he veto the bill."

In an effort to move the bill along, a group of House members submitted a letter to Speaker of the House Paul Ryan, Majority Leader Kevin McCarthy, and House Appropriations Committee Chairman Hal Roger to tack the bill onto any year-end legislation. This is expected to give the bill a better chance of passing.

The letter stated:


"The provisions in H.R. 3192 no way delay the implementation of TRID or shield any wrongdoers from legal recourse or penalties—it simply provides a temporary safe harbor for those making a good-faith effort to comply with a very complex rule."

"We respectfully request that the financial regulatory relief language, such as that included in the FY 2016 Senate Financial Services and General Government Appropriations Act, be modified to reflect the provisions of H.R. 3192 and included in any year-end legislation to provide certainty to the real estate industry and help prevent further costly market disruptions and delays for American homebuyers.”


Click here to read the full letter.

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