How Will TRID Be Enforced?
Now that TRID is here, the next question on everyone’s mind is how will the new rules be enforced? The CFPB has promised to be sensitive to those who make “good-faith efforts” to comply, but what does that really mean?
October 3 has come and gone. That means the TILA-RESPA Integrated Disclosure (TRID) rules are in full effect. Anyone in violation of the new rules can expect severe fines and penalties. This begs the question, “How will the enforcement of TRID be handled?”
Thousands of lenders, financial institutions, settlement agents, realtors, vendors and partners still don’t know how their regulator will enforce the new TRID rules. To date, there has been no declaration from the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC) as to how they will oversee and enforce the new regulations.
Consumer Financial Protection Bureau (CFPB) Director Richard Cordray has said that the bureau will be “sensitive” to lenders who make a “good-faith effort” in compliance, and will “not be punitive” when it comes to the enforcement of the rules.
Small Institutions Have The Most Uncertainty
Even with these assurances, small institutions are nervous. Larger institutions are being kept under close watch. The CFPB has supervision of three-quarters of the total market. But this numbers only about 100 institutions. These large institutions will face undeniable scrutiny, but that leaves nearly 8,000 smaller institutions that are also regulated by the FDIC and OCC with little direction as to the standards they will be held to after October 3.
TRID is different from previous mortgage regulations issued by the CFPB. Under previous changes, not all institutions were affected; the smallest didn’t always have to comply. This is not so with TRID – even the smallest of institutions regulated by the FDIC and OCC must comply with the new rules. This is causing worry among smaller lenders and settlement agents who don’t have large compliance staffs to help them navigate TRID. What determines a “good faith effort?” and “How much leeway will smaller institutions be given?”
Still No Clarity
Although October is here, we are still waiting for clarity from the FDIC and OCC as to how they will enforce the rules. The FDIC issued a letter to its member institutions in June that updated its examination procedures post-TRID, and said those procedures would be its enforcement guidance for the industry.
These changes reflect the addition of TRID rules, amendments, and changes. They explain what lenders must do at every step of the mortgage process to remain in compliance. What is does not explain is how the FDIC will supervise enforcement, what the agency will be watching for, or what liability it plans to hold lenders to right after October 3.
Similarly, the OCC revised its interagency procedures in May to reflect the changes for TRID. The OCC is in the process of incorporating these revisions into the “Truth in Lending Act” and “Real Estate Settlement Procedures Act” booklets of the Comptroller’s Handbook. But, there still hasn’t been a statement on enforcement practices or guidelines. Even more alarming – there was no alignment with the CFPB’s remarks on being sensitive to good-faith efforts.
Protect Your Business With Easy Soft
What does all of this mean for real estate closing agents? It means it is better to be safe than sorry. Don’t risk non-compliance under the hope that your “good faith efforts” will be accepted. There is no need to take on such risk with Easy Soft here to help you. Our real estate closing software suite, EasyRealEstate Suite, is 100% TRID compliant. EasyCDF, designed specifically for the new TRID rules, walks you through the closing process so you don’t miss a single step. A built-in task feature helps you stay on track so you never miss a deadline.
To learn more about the Suite or EasyCDF contact Easy Soft at 1-800-905-7638 or visit us at www.easysoft-usa.com.