A bi-partisan bill was introduced in Congress last week that intends to provide all lenders with a temporary reprieve from enforcement actions for violations under the new TILA-RESPA Integrated Disclosure (TRID) rules (Relief). Under the proposal, lenders would not be subject to enforcement actions through year end 2015. Eligibility would be based on the lender’s “good faith” efforts to comply with the new law.
This is obviously good news for those lenders who have been working hard to implement plans to comply with the new rules. If the stay is granted, these lenders will have the time to evaluate and tweak their processes to ensure long term compliance, without the fear of serious repercussions for an unintended technical glitch. It seems fair for those who have undertaken the task of making a “good faith” attempt at complying with these monumental changes.
On the other hand, for those who are simply not ready, it could pose a serious problem. CFPB has made it quite clear that they have provided ample notice and opportunity for lenders to be prepared to meet the requirements of the new TRID rules. For any who thought this was not going to happen on August 1, you could be in for a big surprise, and not a happy one. If a lender cannot demonstrate a bona fide “good faith” effort at compliance, enforcement for any violations may be inevitable.
One big question is: What will be considered as a “good faith” effort? Another question, who decides? Without some clarity on these issues, the potential delay in any enforcement actions may be a moot point. It would be very dangerous for lenders to move forward feeling comfortable that minor errors or deficiencies would not trigger enforcement, only to find out after the fact that they were misguided in their belief. It is important that the bill clearly identify what could be accepted as “good faith”. One man’s good faith may be another’s non-compliance
Regardless of the bill’s passage, lenders need to ensure they are ready, willing and able to comply with all terms and requirements of the new TRID rules effective for loan applications taken as of August 1. If they are, then the passage of the bill could only help. If they aren’t, then it doesn’t matter. You’re in deep trouble with no relief in sight.
Don’t be caught unprepared. The rules have changed; play different.
If you’re not ready or need a little help, here’s some resource information that will help provide some relief (TRID Guide).