The Message Behind the “Easing” of TRID Enforcement!

I’ve been reading article after article about the easing of the TRID enforcement beyond August 1, 2015 and this is great news. However, every lender should proceed with caution and understand the intent of the release.

First, I want to applaud the CFPB for understanding that turning an operation procedure off on one day and turning it on, in a new way, the next day is likely to be wrought with issues. Even the lenders who are most prepared will still have some hiccups. So Thank You!

But what is the message behind the message? To figure that out let’s read between the lines!

1. The implementation date stays August 1, 2015
2. Delay in enforcement is for those lenders that show “good faith activity”.
3. No timeline on how long the delay or easing may be in effect.
4. No safe harbor from legal issues if you don’t comply with the law; only enforcement safety.
5. Wholesalers and Investors haven’t chimed in yet to let you know if THEY will allow leniency in buying loans out of compliance.
6. An announcement today was made to consumers that state “CFPB will be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the rule on time”.

So what does this mean for lenders? You are going to need to demonstrate “good faith activity”.

In my opinion, the regulators will expect to see the following:

1. You implemented new processes on August 1, 2015.
2. You tested, put technology in place to monitor (sorry but it won’t work without technology) and re-tested based on your findings.
3. You monitor data for accuracy, which is being populated onto the new forms, which are then being sent to the consumer.
4. You have monitoring systems in place to ensure compliance for the timing rules & tolerance rules.
5. Your definition of “received by” and “delivery of” the disclosures are consistent with all of your offices.
6. Your remediation process to the consumer is in place, when monitoring reveals an issue.
7. You demonstrate how you ensure a consumer receives proper time to review the disclosures for closing; as required by the regulation.
8. You’ve checked with your investors to understand how they will accept loans that didn’t meet the new requirements.
9. Your written policy and procedures are in place.
10. Your staff has been thoroughly trained prior to August 1, 2015 and you can prove that.

If you are not doing the 10 things listed above (and there are probably more) then it is unlikely that an examiner will say you acted in “good faith”, so be careful. This announcement is not a “Hooray we don’t need to worry about it” statement. It is a “we understand but proceed with caution” statement.