Last week, the FDIC provided the industry with a Financial Institution Letter (FIL 43-2015) to detail what financial institutions can expect in terms of initial examinations after the October 3rd TRID implementation date. The first blog article in this series regarding TRID exam expectations can be found here.
The Financial Institution Letter came after the CFPB released in mid-September the updated examination procedures the Bureau will rely on to complete initial exams. In July, Director of the CFPB, Richard Cordray, addressed this issue with the Senate Banking Committee, stating “We went out and worked with the other agencies to get an agreement, which we have, that the early examination of this will be diagnostic and corrective.” He went on to state, “And so for the first period, which may last many months, the other agencies and ourselves as we look at this, if we see errors, we will point out what they are and how they should be corrected. We will not be looking to be punitive toward people.”
It appears that the FDIC, based on the content of FIL 43-2015, has followed suit with the wishes of the CFPB in terms of early examinations involving TRID. In addition, during this first week after the TRID implementation date, Fannie Mae and Freddie Mac have also sent advisories to mortgage lenders acknowledging that they will not complete post-purchase loan file review for TRID compliance but instead will look for evidence that lenders made a good faith effort to comply by ensuring the correct forms were used in connection with the mortgage. Technical reviews for compliance will begin after an undetermined transitional period of time.
As we approach the end of the first week after implementation, is your financial institution coping with this massive change? Do you have your policies, procedures and processes in place concerning the Integrated Disclosures? Are you making a good faith effort to comply with the new rules? If you can answer yes to these questions you have met the first requirement of your next examination, at least for some of the regulatory agencies.