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Witnesses in a House Financial Services subcommittee hearing Thursday all agreed that a five-month grace period from CFPB on its TILA/RESPA integrated mortgage disclosure rule, which takes effect Aug. 1, is needed to ensure consumers are not negatively affected during implementation.

Representatives from the American Bankers Association, American Land Title Association, Urban Institute and National Association of Realtors told the Subcommittee on Housing and Insurance that a grace period would allow lenders to work out the new disclosure systems without fear of potential litigation or examination penalties.

Rep. Andy Barr, R-Ky., also noted the letter he helped spearhead with Rep. Carolyn Maloney, D-N.Y., urging CFPB Director Richard Cordray to allow time to test new procedures. NAFCU has also pushed CFPB for flexibility in the early months of implementation while credit unions work to become compliant with the rule. NCUA has already indicated to NAFCU it will focus on good-faith efforts at compliance early on.

Rep. Steve Pearce, R-N.M., discussed his cosponsorship of NAFCU-backed H.R. 2213, which would give financial institutions through Dec. 31 to make a good-faith effort to comply with the new rule without threat of enforcement actions or lawsuit. Rep. Brad Sherman, D-Calif., also a cosponsor of H.R. 2213, who sits on the full House Financial Services Committee said he hoped it wouldn't take "an act of Congress" to get a five-month grace period.

Writing subcommittee Chairman Blaine Luetkemeyer, R-Mo., and Ranking Member Emanuel Cleaver, D-Texas, on Wednesday, NAFCU Vice President of Legislative Affairs Brad Thaler explained why credit unions need time to conclusively test their new platforms for compliance with the rule. Since credit unions won't have time to thoroughly test new systems, they will be "forced to operate two platforms," he wrote, "one that supports the current Good Faith Estimate and the initial Truth-in-Lending disclosure, and one that supports the new Loan Estimate form."