ARLINGTON, Va.–The House of Representatives is expected today to consider HR 3192, the "Homebuyer’s Assistance Act," which has the support of both credit union trade associations.
Sponsored by Reps. French Hill (R-AR) and Brad Sherman (D-CA), the bill would prevent the enforcement of the CFPB’s new integrated disclosure requirements for mortgage transactions under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) (commonly called TRID) before Feb. 1, 2016, so long as a good faith effort to comply is made. The rule went into effect on Oct. 3.
In a letter to House leadership, NAFCU Vice President of Legislative Affairs Brad Thaler urged passage.
“The new disclosure requirements had a hard start date, and there has been no grace period in which mortgage lenders are able to test their new systems,” said Thaler in the letter. “Many of these lenders may rely on outside vendors to have everything correct, and this can lead to unintentional errors while making a good faith effort to comply.
“While National Credit Union Administration Chairman Debbie Matz has indicated that NCUA will consider credit unions’ ‘good faith efforts toward substantial compliance’ relative to TRID, and CFPB Director (Richard) Cordray has made similar statements, NAFCU and our members remain concerned over unresolved ambiguities in the regulation,” Thaler continued. “This legislation will erase all doubt and allow mortgage lenders to comply without fear of enforcement actions.”
In a letter to the House, CUNA said it supports the CFPB’s goal for transparency with the new disclosures helping consumers better understand mortgage terms.
“In the long run, the TILA/RESPA Integrated Disclosure forms will be a positive step for consumers and mortgage lenders, making the application process a bit simpler for borrowers,” said CUNA President and CEO Jim Nussle. “However, the law and its implementing regulation did not provide a transition period that would have been useful for lenders to test systems to ensure they are in compliance before actually having to comply. The absence of a reasonable transition period puts consumers and lenders in jeopardy in the short term because lenders are immediately exposed to enforcement actions and legal liability.”
Nussle added that the French-Sherman bill would protect consumers and lenders from errors that could delay the mortgage lending process in the first four months of implementation.
“It would prohibit regulators from taking supervisory action against lenders acting in good faith to comply with the regulation; and it would shield lenders from the private right of action during the transition, again, provided they are acting in good faith to comply,” wrote Nussle. “These protections would be positive for consumers because they would help ensure that lenders, particularly small lenders, continue to offer mortgage credit in the short term.”