It is that season again. Every time we approach the effective date of a major regulatory change various financial institution associations make last-ditch efforts to delay the changes or the impact of the changes. The outcome is always the same – nothing changes. The Truth-in-Lending/RESPA Integrated Disclosures (TRID) changes are no exception.
Recently the American Bankers Association (ABA) petitioned the Consumer Financial Protection Bureau (CFPB) to provide a grace period that would allow more time for financial institutions to reach full compliance. CFPB Director Richard Cordray has declined appeals from Congress and the ABA to provide a grace period for enforcement of the TILA-RESPA integrated disclosures that are effective for applications received on or after August 1.
Now Representatives Steve Pearce (R-N.M.) and Brad Sherman (D-Calif.) have introduced an ABA-backed bill that would create a safe harbor through the end of the year from enforcement and civil actions if lenders make good faith efforts to implement the new disclosures.
Most financial institutions have the “pedal to the metal,” making more than a “good faith effort” to get everything in place by the August 1 deadline. But some lenders have a lot of faith in the ABA’s ability to obtain relief. They slow down or cease implementation efforts in the belief that relief is forthcoming. When relief efforts fail those lenders are left with significant compliance problems. Remember the ABA is not attempting to make TRID go away; they are seeking relief from enforcement and civil actions if lenders make good faith efforts to implement the new disclosures.
We applaud the ABA’s efforts. We hope they are successful this time around. But the path is obvious – keep the “pedal to the metal.” Don’t rely on the ABA, Congress, or anyone, other than yourself, to assure full compliance by August 1.