WASHINGTON — On the heels of the Consumer Financial Protection Bureau being forced to delay implementation of the new TILA/RESPA Integrated Disclosures (commonly referred to as TRID), CUNA says it has discovered a discrepancy relating to exemptions for small lenders.

In a letter written Friday by Jim Nussle, president and CEO of CUNA, the trade group asked the CFPB to clarify a discrepancy and to exempt credit unions that make five or fewer mortgages in a calendar year from the Know Before You Owe rule, which includes the Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures (TRID).

According to CUNA, it found a discrepancy between the CFPB’s previous TILA-RESPA Small Entity Compliance Guide and supplementary information to the TRID rule compared with text in the latest Small Entity Compliance Guide and the final rule text.

"At its core, this is an issue of transparency," Nussle said in a statement. "The CFPB made a change to the Small Entity Compliance Guide that will affect more than 700 credit unions and numerous other financial institutions but did not highlight, publicize, or explain this change.

"Although listed as a ‘miscellaneous administrative change’ by the Bureau, the new rule is a substantial change that may deal a striking blow to anyone making five or fewer mortgages in a calendar year," Nussle continued. "CUNA urges the CFPB to address our concerns and confirm that creditors making five or fewer mortgages per year, as outlined in the rule’s supplementary information and the September 2014 Small Entity Compliance Guide, are exempt from the TILA-RESPA rule."

Changes In Text

Earlier this month, CUNA said it brought to the attention of CFPB staff a discrepancy related to the scope of the new requirements that CUNA urged the CFPB to address during the re-proposal period. The trade group notes the final rule offers a different description of the scope of the rule than both the guide that the Bureau issued in September 2014 to help small financial institutions understand how to comply with the new rule and the supplementary information that accompanies the rule.

CUNA estimates more than 700 credit unions would be exempt from TRID under the definition provided in the CFPB’s September 2014 version of the TILA-RESPA Small Entity Compliance Guide, which stated, "Consistent with the current rules under TILA, the rule also does not apply to loans made by a person or entity that makes five or fewer mortgages in a calendar year and thus is not a creditor."

However, when the Small Entity Compliance Guide was updated this month, it now reads: "Consistent with the current rules under TILA, the rule also does not apply to loans made by a person or entity that is not a creditor."

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