WASHINGTON — More than a dozen housing groups joined with the credit union trade association to urge lawmakers to pass legislation that would grant lenders a formal grace period for implementing new disclosure forms later this summer, arguing that the industry needs greater certainty than the Consumer Financial Protection Bureau has so far provided.
The consumer agency announced last week that it plans to be "sensitive" to banks and other lenders that are making "good-faith efforts" to comply with the new provisions that go into effect Aug. 1, falling short of offering the formal yearend grace period that housing groups had been seeking. The new rule combines the Truth in Lending Act with the Real Estate Settlement Procedures Act into one mortgage disclosure, called TRID.
Nineteen housing groups, including CUNA, NAFCU, American Bankers Association, Community Mortgage Lenders of America and the National Association of Realtors, are now turning to Congress for action, urging passage of a bill introduced last month that would prohibit enforcement of the disclosures rule until Jan. 1, 2016.
"We appreciate that the Bureau indicated it will be sensitive to the progress made by those entities that make good-faith efforts to comply," the groups said in a June 10 letter to Reps. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, and Maxine Waters, D-Calif., the ranking member. "At the same time, industry needs more certainty that their good-faith efforts to comply while still meeting consumers' expectations does not expose lenders and settlement service providers to litigation during the initial period after the regulation becomes effective."
The House banking panel is expected to debate the bill and several other regulatory relief measures on Thursday afternoon at a financial institutions and consumer credit subcommittee hearing. The proposal, introduced by Rep. Steve Pearce, R-N.M., and Brad Sherman, D-Calif., has 30 co-sponsors.
Nearly 300 lawmakers from the House and Senate — both Republicans and Democrats — urged the CFPB to provide a grace period for mortgage lenders in letters last month, ahead of the agency's decision.