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CFPB Officially Finalizes TRID Effective Date on October 3

compliance-puzzleThe Consumer Financial Protection Bureau (CFPB) has finally set an official effective date for the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, after much debate and numerous industry requests to delay the rule. The CFPB issued a final rule moving the effective date to Saturday, October 3, 2015 on Tuesday.

“The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rule,” the CFPB noted in a statement. “The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. A Saturday launch is also consistent with industry plans tied to the original effective date of Saturday, August 1."

In June, the CFPB announced a proposed amendment to TRID rule, which would move the effective date of the rule to Saturday, October 3, 2015.

According to CFPB, the Bureau is issuing the proposed amendment to correct an "administrative error" that would have pushed the TRID effective date back at least two weeks from its original effective date of August 1, 2015.

The Bureau first announced on June 17 they would be issuing the proposed amendment to push back the TRID launch date. At that time, CFPB Director Richard Cordray announced that the proposed effective date was being moved from August 1 to October 1.

"We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks," Cordray said last week. "We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time."

Art Tyszka, senior director and general manager of Residential Lending Wolters Kluwer Financial Services responded to the CFPB's decision with gratitude and understanding.

“Having witnessed firsthand the significant challenges the industry is facing in preparing for change of this magnitude, we understand the CFPB’s decision to push back the TRID effective date,” Tyszka said. “The two-month extension provides needed breathing room for many lenders to help ensure they are compliant when the deadline arrives."

According to the CFPB, the rule requires easier-to-use mortgage disclosure forms known as the Loan Estimate and the Closing Disclosure to ensure compliance and clearly lay out the terms of a mortgage for a homebuyer. The Bureau issued the change to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until August 15, at the earliest.

The final rule issued today also includes technical corrections to two provisions of the Know Before You Owe mortgage disclosure rule, according to the CFPB.

Click here to view a copy of the CFPB's final rule.

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.

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