On June 17, the CFPB announced it will delay the effective date of the TILA-RESPA Integrated Disclosure rule until Oct. 1.
Originally set to go into effect on Aug. 1, the TILA-RESPA Integrated Disclosure rule, known as TRID, requires lenders to provide two new disclosures to consumers prior to completing a mortgage loan − the Loan Estimate and the Closing Disclosure. Currently, under the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974, lenders provide four disclosures for mortgages.
The delay will allow the CFPB “to correct an administrative error that we just discovered,” said CFPB Director Richard Cordray.
Industry advocates applauded the bureau for providing banks and vendors time to prepare for the change. “ABA is pleased that the Consumer Financial Protection Bureau is extending the effective date for the ground-breaking Know Before You Owe mortgage disclosure rule,” said ABA President and CEO Frank Keating. “This extension will help protect consumers from disruptions during a traditionally busy period for home purchases.”
Addition time will “help all industry stakeholders better prepare for this major change, which will impact the majority of home mortgage loans. Many community banks are still waiting for third-party vendors to provide the required software updates to their loan origination and documentation systems,” ICBA said in a press release.
Earlier this month, the CFPB announced it will allow banks a good-faith enforcement grace period as they work to implement TRID.